Oklahoma Policy Institute released the following statement in response to the tax plan from Governor Fallin and Republican legislators:
We are glad to see that Governor Fallin and legislators have backtracked significantly from the most reckless tax cut proposals they put forward earlier in the year. The current plan preserves the income tax, reduces taxes by a fraction of what was originally proposed, and retains important broad-based tax breaks for working families.
However, Senate and House leaders have insisted for months that any tax cuts must be revenue-neutral so as not to impact the budget. This plan falls far short. It would reduce state revenues by over $100 million at a time when schools and other core services are struggling to recover from years of crippling budget cuts. This means fewer teachers and larger class sizes, higher tuition costs, fewer public safety officers, and less resources for those who serve the most vulnerable Oklahomans. It also leaves us on the hook for hundreds of millions of dollars in payments to oil and gas producers and does nothing to address the skyrocketing costs of these credits.
We are especially disappointed that the plan includes a trigger to automatically ratchet down the top income tax rate in the future. As a bipartisan group of Oklahoma’s most prominent business and civic leaders has stated, deciding tomorrow’s tax cuts today ties the hands of future legislators, makes them less accountable to their constituents, and limits their ability to make the best decisions based on the circumstances that they face.
We hope legislators will reject this flawed proposal and instead produce a plan that does not reduce funding for core services and leaves future tax decisions to future legislatures.