Debate grows over 2016 income tax cut amid $600 million budget shortfall

By Max Resnik:

TULSA – As the state faces an estimated $600 million shortfall, the debate grows about an income tax cut set to take effect in 2016.

On one side of the debate, you’ll find the Oklahoma Policy Institute .

“it just doesn’t make sense to move ahead with a tax cut that wasn’t supposed to take effect under these kinds of conditions,” said David Blatt, the institute’s executive director.

Of 500 registered voters polled by OK Policy , most agree with Blatt. Sixty percent say they’re in favor of delaying or squashing the cut altogether.

“These would inflict real pain for our schools, for public safety, for health, for services that Oklahoma needs to be a prosperous, healthy, safe state,” Blatt said.

But lawmakers like State Sen. Michael Mazzei, R-Tulsa , who sit on the other side of this debate, say the tax cut isn’t the budget’s biggest problem.

“The budget problem is really a factor of the explosion in dedicated funds that receive money before the moneys are allocated to the general revenue appropriations process,” said Mazzei, who co-authored the income tax cut legislation .

He also says there are too many special interest tax breaks totaling $2 billion.

Mazzei says the legislation will save taxpayers about $200 million. That money, he says, will be a buffer to combat the oil and gas industries’ impact on the deficit. Mazzei says sales tax revenue projections are 4 percent higher than they were a year ago.

“Letting Oklahomans keep more of their hard-earned money is a boon to the consumer spending aspect to the economy,” he said.

According to OK Policy, the average middle-income household will net $29 from the tax cut. Additionally, 40 percent of Oklahomans won’t get anything back from the state government.

The legislature wraps at the end of May and must balance the budget.

Blatt hopes a suspension to the tax cut can be worked out in the next couple of weeks.



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