Oklahoma House of Representatives send Senate counterparts several options to cut taxes

House Speaker Charles McCall, right, greets Rusty Cornwell, left, and Jon Echols, majority floor leader, on Feb. 7 during the second day of the 2023 session in the Oklahoma House of Representatives.
House Speaker Charles McCall, right, greets Rusty Cornwell, left, and Jon Echols, majority floor leader, on Feb. 7 during the second day of the 2023 session in the Oklahoma House of Representatives.

As lawmakers debate how to spend billions of dollars of surplus state funds, the Oklahoma House of Representatives has sent their Senate counterparts several options to cut taxes.

First, the House advanced a measure to eliminate the sales tax on groceries. On Wednesday, House lawmakers approved a bill that would reduce the income tax rate by half a percent. Then on Thursday, the House passed a flat tax proposal that would peg the individual income tax rate at 4.25%.

There is no guarantee, however, that the Senate will consider any of those bills. It's likely that any tax cut will be part of a budget agreement, which usually isn't reached until late in the session. A spokesman for Senate President Pro Tem Greg Treat said the tax cut measures will go through the same legislative process as all other bills the House sends over.

More:Polls show Oklahomans would prefer a grocery tax cut

Eliminating the grocery tax has strong bipartisan support, at least in the House, where it passed 88-7 on Tuesday.

Cutting the personal income tax rate drew some opposition later in the week from Democrats, who urged the majority to consider funding infrastructure priorities or focusing on tax credits that would help disadvantaged Oklahomans.

One version of a tax cut introduced by House Speaker Charles McCall would reduce the rate in all six tax brackets by half a percent, setting the top marginal rate at 4.25%. Adopting this proposal is estimated to cut state revenue by nearly half a billion dollars in 2025.

Another tax cut proposal approved by the House would implement a flat tax. Under this bill, any earnings over $7,200 for individuals or $12,200 for married filers would be taxed at 4.25%. The fiscal impact for a flat tax would be slightly higher than the other tax cut legislation.

House Democrats opposed both income tax cut plans this week. State Rep. Mickey Dollens, D-Oklahoma City, reminded lawmakers of the situation six years ago when lawmakers faced a budget crisis and were forced to raise taxes.

"I would just ask you to be prudent and take into consideration the burden that you'll be putting on future Legislatures by starting to chip away at our revenue just six short years from when we got everything back on track," Dollens said during debate.

How much would it help?Oklahoma families may get a $5K tax credit for private schools.

Another Oklahoma City Democrat, Forrest Bennett, suggested that lawmakers should reexamine the philosophy around cutting taxes.

"I would argue that instead of celebrating that we are lowering taxes, we should do a better job of selling why we tax people. And I'd argue that, perhaps, we should make better public investments so we can show the people of Oklahoma why it is OK that they pay their taxes," said Bennett. "I would argue that we do something more creative than a tax cut. Because at the end of the day, no one's going to really feel the effect of a tax cut as much as they're going to feel the effect of my pie-in-the-sky idea of a high-speed rail between Oklahoma City and Tulsa."

But the reality of the situation, said House Floor Leader Jon Echols, is that he is ready to have a robust conversation that ends with Oklahomans keeping more of their money instead of sending it to the state.

"The House plan has one plan. The House plan is the citizens of the state of Oklahoma are entitled to keep more of their hard-earned money," said Echols, R-Oklahoma City.

This article originally appeared on Oklahoman: Oklahoma House of Representatives sends tax cut bills to state Senate