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Oklahoma legislative leaders optimistic about tax cut, workers' comp laws

Gov. Mary Fallin and Republican legislative leaders say they are committed to reducing the personal income tax and overhauling the workers' compensation system.
BY MICHAEL MCNUTT Modified: April 15, 2013 at 2:02 am •  Published: April 15, 2013

Last-minute twists and turns have strained feelings, but Republican legislative leaders and the GOP governor say they are on track to reduce Oklahoma's top personal income tax rate and overhaul the workers' compensation system.

All say they want to avoid what happened last year: Proposals to reduce the personal income tax and to change a part of the workers' compensation system, both high priorities then as they are now, failed to advance.

The workers' compensation measure, contained in Senate Bill 1062 by Senate President Pro Tem Brian Bingman, R-Sapulpa, and House Bill 2032, which contained an income tax cut proposal by Gov. Mary Fallin and House Speaker T.W. Shannon, R-Lawton, made it through last week's latest legislative deadline.

Most bills generated in the House of Representatives had to be heard by Senate committees, and most bills that originated in the Senate had to be heard by House committees by Thursday.

Lawmakers have until April 25 to send the bills back to their originating chamber, and then spend the next month trying to get legislation passed.

Income tax proposals

House Minority Leader Scott Inman, D-Del City, said failure of either the income tax cut or workers' compensation measure would adversely affect the other.

“The speaker and the governor are adamantly in favor of an income tax cut while the pro tem is less supportive of an income tax cut, but certainly passionate about his workers' compensation reform package,” he said.

“I'd argue that if both don't get passed, neither probably gets passed.”

Another income tax proposal, SB 585, didn't survive.

A House subcommittee two weeks ago voted not to pass it, which came close to derailing HB 2032.

Sen. Mike Mazzei, the author of SB 585 and chairman of the Senate Finance Committee, retaliated at first by refusing to hear HB 2032.

He changed his mind a couple days later when he gutted HB 2032 and inserted new language.

Fallin was livid about the change to her proposal, an aide close to the governor said.

The aide spoke only on terms of confidentiality because he was not authorized to speak publicly.

The governor's office, after hearing that SB 585 would not pass the House panel, received assurances from GOP Senate leadership that her measure would be heard and approved by the Senate.

The governor considered speaking out against the changes but eventually decided to publicly remain calm and encourage lawmakers to agree on an income tax cut proposal before the session ended.

Fallin and Shannon proposed a simple reduction of the top personal income tax rate from 5.25 percent to 5 percent, effective Jan. 1.

The new version of HB 2032 calls for reducing the top personal income tax rate to 4.95 percent, taking effect in 2015.

It also ends the practice of five popular economic tax credits being sold to others who need to reduce their income tax liability to the state.

Bingman said the Senate may also consider more changes, such as eliminating or reducing tax credits or deductions.

Opponents of eliminating certain credits or deductions last year helped lead the defeat of several income tax-cutting bills.

Workers' comp

Meanwhile, several House members changed the wording of SB 1062, which was approved last week by a House committee. Its main intent to change the workers' compensation system from a judicial system to an administrative one remained intact.

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