A Senate committee gutted Gov. Mary Fallin's personal income tax-cutting proposal Thursday and replaced it with a new plan.
Sen. Mike Mazzei, R-Tulsa, chairman of the Senate Finance Committee, inserted the new language in House Bill 2032 three days after a House budget subcommittee voted down his measure to reduce the personal income tax.
Proponents of a personal income tax cut said the apparent retaliatory action could cause efforts to fizzle just as they did a year ago when lawmakers, after sorting through five income tax-cutting measures, couldn't agree on two compromise bills the last days of the session.
Legislative leaders, however, said they are determined to deliver an income tax cut before the session is scheduled to end in late May. Uncertain is how much HB 2032 will resemble the final version.
“This is a work in progress,” said Senate President Pro Tem Brian Bingman, R-Sapulpa. “This just keeps our discussion going.”
About the changes
The changes call for reducing the top personal income tax rate from 5.25 percent to 4.95 percent, and ending the practice of five popular economic tax credits from being sold to others who need to reduce their income tax liability to the state.
The Republican governor issued a statement urging the GOP legislative leaders to keep working on a tax cut.
“My priority is to have a responsible, meaningful tax reduction package signed into law this year,” Fallin said. “I appreciate the words of support for the principle of tax reduction coming from the Legislature. Now it's time for action. I encourage the Senate and House to come together, negotiate, decide on the details of a tax cut plan and send it to my desk.”
HB 2032 originally called for reducing the top rate to 5 percent. It would have been paid out of existing revenue and would have taken effect Jan. 1.
Mazzei's original bill, Senate Bill 585, would have reduced the state income tax to 4.75 percent; some of its cost would have been offset by eliminating some exemptions and tax credits with the rest coming out of existing revenue. It would have taken effect Jan. 1, 2015.
The bill received criticism because it raised the income tax rate on certain taxpayers.