Enid News and Eagle
ENID, Okla. —
It looks like Oklahomans will see an income tax cut starting in 2015.
A measure to cut the top tax rate from 5.25 percent to 5 percent starting in January 2015 was approved Wednesday by the state Senate. The bill also includes a provision to cut the rate again to 4.85 percent in 2016 — as long as state revenues continue to rise.
The measure goes on to the House, where the overwhelming Republican majority is expected to give its approval.
Last year, a proposal Gov. Mary Fallin championed to cut the tax rate fell apart after lawmakers balked at eliminating exemptions, deductions and credits.
The legislation going through the process this year does not address exemptions, deductions and credits.
We’ve urged the Legislature to go easy on tax cuts at this time. The biggest reason for our caution was the uncertainty facing our state’s economy. Revenues have been up in the past couple of years, mainly because of the energy boom.
How long the boom will last remains unknown. Natural gas prices remain low, and oil prices have been fluctuating.
According to state finance officials, cutting the top income tax rate to 5 percent is expected to have an impact of about $136 million annually when fully implemented. The second reduction to 4.85 percent would bring the overall annual cost to $237 million.
That’s a lot of money to make up if something were to happen to the economy.
It wasn’t that long ago the state was in a terrible financial crunch during the Great Recession. All state agencies endured deep cuts that impacted services. Those cuts also affected the state’s ability to take care of its infrastructure needs — mainly to our highways and bridges. Those needs remain.
We hope things work out like tax-cut supporters say they will — that the tax cuts will spur more businesses and industries to look to Oklahoma as the place to be.
We’d hate to say we told you so.