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Governor urges income tax cut, cites $5 billion reserve and flat operating budgets
Summary
The governor presented fiscal data arguing Oklahoma can afford an income tax cut, saying state revenues and a multi-billion-dollar reserve remove the need for cuts to core services.
The governor on Monday urged the Legislature to approve an income-tax cut this year, saying state revenues and a growing ‘‘savings account’’ mean Oklahomans can keep more of their pay without cutting core services.
Speaking from a slide presentation, the governor said Oklahoma's spending authority set by the Board of Equalization is $12,360,000,000, that total revenues from all sources are $11,200,000,000 and that ongoing operating expenses — excluding one-time items — total about $11,100,000,000. "We're not 300,000,000 in the hole. Our income is 11.2 and our expenses right now are 11.1," the governor said.
He said the state's savings account stood at about $4,600,000,000 and is expected to exceed $5,000,000,000 after the fiscal year ends June 30. "We can invest some of this. We can save it. We can invest it in strategic things," he said, citing examples such as university facilities that the Legislature might fund.
The governor described tax cuts as economic stimulus, saying prior reductions in the income tax rate corresponded with revenue growth and broader economic expansion. He compared Oklahoma's rate to neighboring and peer states — noting Texas and Florida have no income tax, and pointing to recent cuts elsewhere — and argued a phased approach could keep Oklahoma competitive for business recruitment.
He said a cut would not mean reductions in core services, but would give residents "a pay raise" by letting them keep more of their own money. He also said he has called three special sessions to press for tax reductions and suggested incremental cuts in prior years would already have reduced the rate further.
The governor opened the presentation to questions from reporters and said he supports holding agency budgets flat to slow government growth while preserving core functions. He added that, if a supplemental appropriation for mental-health services were needed, the state has the capacity to provide it because of the reserve.
The governor did not specify legislation or dollar amounts for a proposed tax cut; he framed the matter as a legislative decision and said he had urged earlier incremental reductions. Next steps would depend on action by the Legislature and any bills introduced there.
