Halt the next income tax cut – SB 170

As a result of continued declines in state revenues, another cut to Oklahoma’s top income tax rate will not be triggered in 2018. However, unless legislators take action this year, the top income tax cut rate could kick in automatically as early as 2019, well before Oklahoma’s budget will have had a chance to stabilize.  After the steep funding cuts of recent years, legislators should halt this tax cut and make sure we have the revenues to do what Oklahomans expect from state services before going ahead with any further tax cuts. Two bills that would fully repeal the next income tax cut  (SB 170) or delay it for several years (SB 130) have been making their way through the legislative process.

Where Things Stand (as of 5/8)

SB 170 passed the full Senate 39-6 on March 13th (click here to find out how your Senator voted). SB 130 was initially defeated on a vote by the full Senate but then passed 34-8 on a motion to reconsider   Click here to find out how your Senator voted.

Both bills passed the Finance Subcommittee of the House Appropriations and Budget Committee on March 29th. SB 170 then passed the full House Appropriations and Budget Committee on April 3rd and passed the full House on April 19th on a vote of 75-12. Click here to found out how your Representative voted. SB 130 will not emerge from committee.

The House amended SB 170 by restoring title, which had been stricken in the Senate. The Senate then passed the amended bill, 32-9, on May 8th, sending the bill to the Governor. See how your Senator voted by clicking here.

OK Policy’s statement praising passage of SB 170:

The repeal of this tax cut is a milestone. After years of promises that income tax cuts would pay for themselves, a majority of lawmakers have finally begun to recognize the cost. We cannot afford more tax cuts that have drained resources from our communities without paying off in economic growth.

While repealing the next tax cut won’t help to resolve Oklahoma’s current budget shortfall, we hope that it begins the restoration of responsible budget and tax policies in the years ahead. This is also a hopeful sign that lawmakers now realize tax policy decisions should be based on current conditions, not automatic triggers created by prior Legislatures.

What You Can Do

Gov. Fallin is expected to sign SB 170. You can call the Governor at 405-521-2342 to encourage her to sign the bill.

Talking Points

• Legislators need to give the budget time to recover before any further tax cuts take effect. Because of how the tax cut legislation was written years ago, the next tax cut could be triggered next year, even if tax collections remain far below pre-recession levels and the state continues to face ongoing budget shortfalls.
• Adding yet another tax cut is the wrong priority for Oklahoma that will only make it harder to pay competitive wages to teachers and state employees, provide essential health and public safety programs, and meet other core functions of state government.
• Automatic tax cut triggers are undemocratic and fiscally irresponsible. They take power away from citizens and prevent elected officials from managing Oklahoma’s tax system using the best information about our state economy and budget.
• We all know what it takes to create strong communities – good roads, schools, and so forth – but right now our budgets are prioritizing tax breaks instead. We should have no more tax cuts until we have a sound plan in place to fund essential systems.

See our Advocacy Toolkit page for more information and resources.

You can look up your Senator and Representative here, call the House switchboard at 405-521-2711, and call the Senate switchboard at 405-524-0126.