OKLAHOMA CITY (AP) — Gov. Mary Fallin and legislative leaders have reached a deal to cut Oklahoma's top personal income tax rate to 5 percent, beginning in January 2015, two Republicans with direct knowledge of the discussions confirmed on Tuesday.
Fallin, Senate President Pro Tem Brian Bingman and House Speaker T.W. Shannon scheduled an announcement Tuesday afternoon to discuss details of the tax cut, plans to overhaul the state workers' compensation system, and “progress on major legislative items.”
Two Republicans with knowledge of the discussions told The Associated Press the tax cut will include a drop in the top rate from 5.25 percent to 5 percent, starting Jan. 1, 2015. A second cut to 4.85 percent would take effect in January 2016 if certain revenue triggers are met.
Both spoke on condition of anonymity because they were not authorized to disclose the plan ahead of the announcement.
Cutting the state's personal income tax rate has been a top priority for Fallin, who proposed a major reduction in the rate in 2012 only to see an agreement on the plan fall apart in the waning days of the legislative session.
This year, Fallin proposed a more modest plan to cut the top rate from 5.25 percent to 5 percent, beginning in January. Her proposal was embraced by Shannon, but gutted in the Senate and replaced with a proposal to delay the cut until 2015 and drop the top rate to 4.95 percent.
Fallin and Shannon both expressed a willingness to delay the cut if it meant a deeper cut. The plan could be seen as a political victory for all sides — Fallin would be able to sign a tax cut into law this year, the Senate would have effectively delayed the cut until 2015, and Shannon was able to secure a deeper cut to the rate.