Claremore Daily Progress

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February 4, 2013

Fallin calls for smaller tax cut

OKLAHOMA CITY — Oklahoma Gov. Mary Fallin called for a modest cut to the state’s top income tax rate Monday in her annual State of the State address to lawmakers as the 2013 legislative session got underway.

In a departure from last year’s address, when she unveiled a major overhaul of the state’s tax code and deep cut to the top rate, Fallin this year is proposing a one-time cut of one quarter of 1 percent. Her proposal would drop the rate from 5.25 percent to 5 percent for most tax filers in the state and cost $106 million when fully implemented in 2015, according to the governor’s estimate.

“This proposal gives us the flexibility we need to ensure that we are reducing taxes responsibly without starving government,” Fallin said in prepared remarks. “This is not the last tax cut we will see from my administration. I am serious about lowering taxes, and I will work to get us a lower income tax rate that makes us more competitive with our neighbors to the north and to the south — both of which have lower taxes than Oklahoma.”

Fallin also called for further changes to the state’s pensions that would reduce the unfunded liability of the major systems, an overhaul of the workers’ compensation system and an immediate boost in funding for repairs to the Capitol and teacher benefits.

Fallin also released her executive budget, which is her recommendation for how lawmakers should divvy up the estimated $7 billion in revenue they are authorized to appropriate this year. The governor’s budget often serves as a starting point for negotiations with lawmakers on how the state revenue will be allocated. Although the final amount for how much lawmakers will have to spend for the fiscal year that begins July 1 won’t be determined until later this month, early projections are that they will have about $170 million more to spend this year than last year.

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