Oklahoma Senate leader dismisses House tax cuts as ‘political theatre’

The Oklahoma House on Wednesday approved a package of bills to cut the state grocery tax and lower personal income tax, but the state Senate leader called it of “political theatre”.

As House lawmakers voted on seven bills to cut taxes, the Senate had already adjourned for the day with no immediate plans to return to the special session on tax relief called by Gov. Kevin Stitt.

Pro Tem Sen. Greg Treat, R-Oklahoma City, said the House prioritized political expediency over sound fiscal policy. Noting that special sessions cost the Senate about $20,000 a day and likely double that for the lower house, Treat accused the House of wasting taxpayers’ money on a political stunt.

“It’s really about having political mail to send saying ‘we’re cutting your taxes,'” Treat said.

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It seems unlikely that the Senate will vote on the tax cut proposals.

House Speaker Charles McCall, R-Atoka, said the Senate should stop dragging its feet and act as soon as possible.

“The Senate spent all of its time this week finding reasons not to help Oklahomans with inflation,” McCall said in a statement. “From the beginning of studies to the refusal to author bills already drafted by senators in regular session, to the deliberate refusal to call a session to act on bills passed by the House and requested by the governor, the Senate has no more excuses.

“The people of Oklahom are tired of waiting.”

McCall

Treat said the Senate was open to tax cuts, but he said his chamber would take a methodical approach to the changes by forming a task force to study tax reform. The working group met for the first time on Wednesday behind closed doors.

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Governor Kevin Stitt praises House tax cut bills, calls on Senate to act

Stitt praised the House for heeding his call to cut taxes when inflation is at its highest level in four decades and food prices have risen.

“Oklahoma families need relief from inflation now and I’m glad the House passed legislation to eliminate the state’s food sales tax and lower the tax on personal income, which I called for in my State of the State Address in February,” Stitt said in a statement. .

Citing complex rules of procedure for the Legislative Assembly, Treat argued that even if the Senate were to pass the tax cut bills, the measures could not be forwarded to the governor’s office because the House had already adjourned. the special session for the last time.

Stitt was “tricked” into thinking the special session was half-successful even though the House ultimately rejected his own tax cut proposals because they can’t advance to the governor’s office, Treat said.

In a press release, House Majority Leader Jon Echols, R-Oklahoma City, called Treat’s statements inaccurate.

“Ultimately, if the Senate passes bills instead of fabricating bogus legal excuses, Oklahomans could stop paying state sales tax on groceries on July 1,” said echos. “If senators don’t want to help Oklahomans, they should just say so and stop blaming everyone but themselves.”

The House approved proposals to temporarily or permanently reduce all state personal income tax rates by 0.25% and to temporarily or permanently eliminate the 4.5% food sales tax. % of State.

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How would the tax cuts be financed?

Together, the two tax cuts would cost about $513 million a year.

To offset the costs, the House passed legislation to cut $245 million from the Oklahoma Health Care Authority’s budget for the coming fiscal year. The rest of the tax cuts would be covered by unspent funds and money freed up when Stitt vetoed two tax relief proposals last month.

Stitt called the special session after vetoing one-time $75 direct rebates for all taxpayers and a bill to eliminate the 1.25% tax on all vehicle sales, which lawmakers will have been committed for years to cancel.

Because the Health Care Authority has $824 million in cash reserves, the budget cut would not affect the agency’s operations or programs, said House Appropriations Chairman Kevin Wallace, R- Wellston.

The House has abandoned plans to make cuts to two other agencies – the governor’s office and the Office of Corporate and Management Services. Instead, lawmakers increased the Health Care Authority’s cut to 28% of the agency’s funding for the 2023 financial year.

House Speaker Pro Tem Kyle Hilbert, R-Bristow, said the House has taken bold steps to fight inflation.

“As a state, we’re sitting on a record surplus, that’s because we’ve done a good job of managing taxpayers’ money,” he said. “But it’s hard to take the position of bragging about the large surplus we have while making Oklahoma taxpayers pay $4.50+ at the (gas) pump.”

Kyle Hilbert

The smallest details of the proposals

The House has approved bills to permanently reduce 0.25% of all personal income tax rates or to enact the reduction for two years.

The Legislature and Stitt last year approved a 0.25% reduction in all personal income tax rates, bringing the top rate, which most Oklahomans pay, to 4.75%. This tax cut and a 2% reduction in state corporate income tax went into effect on January 1.

With bipartisan support, the House approved bills to permanently eliminate the state’s 4.5% food sales tax or suspend it for two years. Some of the bills would prevent municipalities from raising their grocery taxes after the state share disappears.

The House also passed a two-year enhancement to the state’s grocery sales tax relief credit from $40 to $200.

Senate leaders said the House offered a list of tax cut proposals without any overarching plan.

“They’re throwing ideas around the House to see what sticks to the wall,” Sen. Roger Thompson said. “The people of Oklahoma deserve better leadership.”

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