Committee advances bill that triggers phased income-tax cuts after $300 million revenue growth

The Senate Revenue and Taxation Committee advanced House Bill 1539, a high-profile proposal that would create a formula to trigger automatic reductions in the state personal income tax after specified revenue growth thresholds are met.

Under the bill as explained by sponsor Senator Bergstrom, a cumulative net revenue increase of $300 million in total collections (measured year-over-year by the Oklahoma Tax Commission and reported to the Board of Equalization in December) would trigger a 0.25 percentage-point reduction in personal income tax rates. Each triggered cut would take effect the following calendar year; once a cut occurs the trigger resets and requires another $300 million of cumulative growth to trigger a further reduction. Bergstrom said the bill projects a 3.3% average annual revenue growth and estimated the first cut could occur around 2028, with the proposal potentially eliminating the income tax in roughly 25 years under that growth assumption.

"This requires a $300,000,000 net cumulative positive growth before a quarter percent personal income tax cut is triggered," Bergstrom said. He described the design as a guarded, multi-year trigger intended to avoid cuts during downturns.

Committee members pressed on technical details and timing. Senator Kirk asked whether the bill's definition of "total collections" would include federal funds reported in the state's annual report; Bergstrom said his working assumption was that federal receipts were not counted but that he would confirm the language. Kirk also raised concerns about the timing between the Board of Equalization's December report and the practical window for implementing a rate change the next calendar year; Bergstrom and other members discussed possible clarifying language to ensure the bill's effective date matched legislative and BOE calendars.

The committee also considered and approved an amendment restoring the bill's title; sponsors said that move signals intent to pursue the measure and that additional amendments will be worked on by Senate leadership. The amendment carried and the bill as amended received a committee recommendation to pass. Recorded support in committee was 10 ayes and 2 nays.

Supporters cited other states that have used trigger mechanisms; critics warned triggers based on fixed dollar amounts can hamstring future budgeting, questioned whether federal receipts are excluded, and urged clarity on timing and implementation. The committee vote advances the bill to further consideration with the sponsor and leadership indicating a willingness to refine the text.