The Enid News and Eagle, Enid, OK

State, national, world

December 19, 2013

Shortfall throwing a blanket on Fallin’s income tax cut plans

OKLAHOMA CITY — After two consecutive years of pushing for an income tax cut for Oklahoma families, Gov. Mary Fallin seemed less enthusiastic about the idea Thursday, when she learned the Legislature will have about $170 million less to spend on state programs next year.

Just days after the Oklahoma Supreme Court tossed out a bill she championed to cut the top personal income tax rate and spend $120 million on Capitol repairs, Fallin said it was too early to tell whether she would push for a tax cut again next year.

“We’re going to continue to talk to the Legislature about what is possible this legislative year, as far as it relates to tax cuts,” Fallin said.

Fallin said she still supports the idea of lowering taxes to create a better business climate, “but we have a lot of other needs in Oklahoma.”

Fallin made the comments after the Board of Equalization certified the Legislature will have about $6.96 billion to spend on the budget for the fiscal year that begins July 1. That’s about $170 million, or 2.4 percent, less than lawmakers appropriated on the current fiscal year, even after the board agreed to put about $103 million back into next year’s budget as a result of Tuesday’s decision by the Supreme Court.

A bill to slash Oklahoma’s top personal income tax rate from 5.25 percent to 5 percent, beginning in 2015, and to divert $120 million over two years to pay for Capitol improvements, was ruled unconstitutional by the high court on Tuesday because it contained more than one subject.

Fallin already is calling on the Legislature to consider paying for the Capitol improvements with a bond issue, an idea that has been rejected by the increasingly conservative House and Speaker T.W. Shannon, R-Lawton, who has pushed for a “pay-as-you-go” approach to infrastructure improvements.

A spokesman for Shannon did not immediately respond Thursday to a request for comment, but a post on the speaker’s Facebook page said the governor, House and Senate all agreed last session to cut taxes and not assume debt for the Capitol repairs.

“The Supreme Court has undone that agreement, but I’m still committed to providing tax relief to Oklahoma families, and I’m still opposed to adding more debt that will burden future generations,” Shannon’s post read.

Fallin suggested the revenue situation should force policymakers to take another look at the idea.

“I think it’s something our legislators need to think about,” Fallin said. “We have very low bond indebtedness in the state of Oklahoma ... and (bond) prices have been very, very good. And by 2018, 85 percent of the state’s debt with bond issues drops off the books.”

The $6.96 billion in certified revenue will be used by Fallin to build her executive budget, which she will present to the Legislature at the start of the legislative session in February, and often is used as a starting point for negotiations with legislative leaders. The board will certify a second estimate for the Legislature in February, and Fallin said she’s hopeful the revenue picture might improve by then.

“We’re hoping that once we get our second round of numbers in February, and get our December sales tax collections in from the Christmas season, there might be some better news for the state,” Fallin said.

Accomplishing a cut in the income tax has been an elusive political goal for Fallin. Her aggressive plan to slash the tax rate fell apart in 2012 after the Legislature first balked at eliminating numerous tax deductions and exemptions to help offset the cost of the plan, then wouldn’t endorse it after learning some Oklahoma taxpayers would actually see their tax liability increase.

Fallin seemed to have accomplished her goal earlier this year when she and legislative leaders agreed to one-quarter of 1 percent cut in 2015, followed by a second cut in 2016 if certain revenue conditions were met, but that proposal was thwarted by Tuesday’s court ruling.

Both politics and the state’s dwindling revenue collections could conspire against Fallin in 2014.

“We have to see two things: what’s fiscally possible and what’s politically possible,” said Fallin spokesman Alex Weintz.

Text Only
State, national, world
  • Diamondback.jpg Watonga prison lays off nearly 100 employees

    The Diamondback Correctional Facility has been vacant since 2010, when the state of Arizona opted not to renew its contract with the prison.

    April 18, 2014 1 Photo 2 Stories

  • Nepal Everest Avalanc_Hass(1).jpg Avalanche sweeps down Everest, killing at least 12

    The Sherpa guides had gone early in the morning to fix ropes for other climbers when the avalanche hit them at about 6:30 a.m., Nepal Tourism Ministry official Krishna Lamsal said from the base camp where he is monitoring rescue efforts.

    April 18, 2014 2 Photos

  • Sinking ferry web.jpg Transcript shows ferry captain delayed evacuation

    The confirmed death toll from Wednesday’s sinking off southern South Korea was 26, most of bodies found floating in the ocean, the coast guard said. But 48 hours after the sinking the number of deaths was expected to rise sharply with about 270 people missing, many of them high school students on a class trip. Officials said there were 179 survivors.

    April 17, 2014 1 Photo

  • Obama mug web.jpg Obama: Defending health law good for some Democrats

    For their part, Republicans practically dare Democrats to embrace “Obamacare,” the GOP’s favorite target in most congressional campaigns.

    April 17, 2014 1 Photo

  • Obama Ukraine web.jpg Obama shows skepticism on Russia in Ukraine

    Obama did not say what additional sanctions might be in the offing if commitments made by Russian Foreign Minister Sergei Lavrov in Geneva do not materialize.

    April 17, 2014 1 Photo

  • Gay Marriage Oklahoma web.jpg Circuit judge in gay marriage case asks pointed questions

    The two cases are the first to reach an appellate court since the U.S. Supreme Court last year struck down the federal Defense of Marriage Act.

    April 17, 2014 1 Photo

  • Scott Inman web.jpg Oklahoma House Democratic leader Scott Inman: No time for tax cut

    Inman made the comments a little more than two weeks after as many as 25,000 teachers, administrators and students rallied March 31 at the Capitol to urge lawmakers to restore $200 million in public education funding that has been lost in recent years due to budget cuts.

    April 17, 2014 1 Photo

  • Minimum wage web.jpg Some workers are excluded from minimum wage, increased or not

    The federal Bureau of Labor Statistics says nearly 1.8 million hourly workers were paid below $7.25 last year — about 2 percent of the 76 million Americans earning hourly wages. An additional 1.5 million earned exactly $7.25.

    April 16, 2014 1 Photo

  • Boston Marathon web.jpg Boston Marathon organizers confident of safe race on Monday

    Security plans include thousands of uniformed police, hundreds of plainclothes officers and about 100 strategically positioned video cameras that will monitor the crowds. Police also strongly discouraged spectators from bringing backpacks.

    April 16, 2014 1 Photo

  • Airlines helpful fuel web.jpg Why high oil prices actually are good for airlines

    These changes, along with high oil prices, have created an insurmountable roadblock to startup airlines that hope to undercut established carriers.

    April 16, 2014 1 Photo

Featured Ads