“We better get to work,” Doerflinger said.
“Time is running out,” Sears said.
SB 1230 is similar to a proposal Mazzei developed last year after several hearings in Tulsa and Oklahoma City on ways to change the tax code, which included reducing personal income tax rate. That proposal, SB 1623, passed the Senate but didn't get a hearing on the House floor.
SB 1230 would eliminate more than 30 tax credits available to businesses and several preferences available to individuals, such as the low-income property tax credit and the state earned-income tax credit. It also would eliminate the college savings program deduction and the political contribution deduction.
It would eliminate the personal exemption for single filers with a gross income of $35,000 or more and for joint filers with a gross income of $70,000 or more.
The grocery sales tax relief would be allowed, but it would no longer be refundable, and transferable credits would be made refundable, according to the measure.
The film rebate program would be cut from $5 million a year to $4 million a year, and the income level to receive a child care credit would be lowered from $100,000 to $50,000.
SB 1230 doesn't change exemptions for retirees and military personnel and keeps the standard and itemized deductions.
“By keeping those tax credits and breaks that work, modifying those that need adjustments and pitching those that don't benefit our economy, we've been able to create a tax cut plan that is fully paid for in fiscal year 2013 and 2014, protecting our core state services,” Mazzei said.
“I'm extremely proud of our members who have taken on the complex challenge of giving Oklahomans thoughtful and sustainable tax reform, ensuring our citizens are the top priority, not the special interests and their sacred cows,” he said.
A House proposal calling for reducing the top personal income tax rate by 3 percentage points to 2.25 percent stalled in the Legislature when House members failed to eliminate or reduce several economic tax credits that were a part of paying for the loss of the personal income tax revenue. Fallin's plan also called for some of those credits to be changed or cut.
Steele said the House in January outlined a plan to eliminate $300 million in tax credits as a way to pursue a significant income tax reduction, but bills calling for getting rid of the tax credits failed to advance in the House.
“The House has since proposed returning some of the state's net growth revenue to taxpayers instead of pursuing the Senate's plan to end credits that benefit seniors, children, child care, small businesses, people saving for college and others,” Steele said. “The House's conclusion has been that a comprehensive cost-benefit analysis of those credits needs to be conducted before eliminating them.”
Fallin said the state's economy is improving and lawmakers should use increased revenue earnings to pay for some of the income tax cuts.
“With collections through April of this year now $350 million higher than originally expected, it's clear that Oklahoma's economy is quickly rebounding from the national recession,” she said. “This puts lawmakers in a great position — not only can they avoid the kind of widespread budget cuts we've seen in recent years, they can do so while pursuing a significant reduction in the state income tax. As Oklahoma continues to get good news about our revenue forecast, I would encourage our lawmakers to put that money where it belongs — back in the pockets of our hardworking citizens.”