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Oklahoma
News
February 20, 2025

Oklahoma legislative leaders hesitant to cut income tax

By BARBARA HOBEROCK OKLAHOMA VOICE 

OKLAHOMA CITY – Legislative leaders on both sides of the aisle have expressed reluctance to fully embrace a cut in the state’s income tax rate championed by Gov. Kevin Stitt.

Republican leaders said they were concerned about the timing of Stitt’s proposed halfa- percent cut given the expected $600 million price tag and because they entered session with an estimated $300 million less to spend just to keep the budget flat.

Stitt is urging legislators to reduce the 4.75% income tax rate by .50% with a path toward elimination, and he has insisted it will cost the state coffers $202 million in revenue.

Senate President Pro Tem Lonnie Paxton, R-Tuttle, said estimates show a half-percentage cut will cost as much as $600 million. He said Stitt’s calculations only include a partial year.

He doesn’t want to pass any monetary policy that could destabilize budgeting for future Legislatures.

“If I leave the Legislature and three to four years after I’m gone, the Legislature has inherited major budget deficits with no savings because of some action that I took, that I will feel like my entire 12 years here was a complete failure, so I don’t want to do that,” Paxton said.

He said it wasn’t long ago that the state had billion dollar budget deficits and no savings.

Paxton said he supports a recurring income tax cut, but does not want to pay for it using savings.

Stitt’s office said Oklahoma has about $4.6 billion in reserves and unspent revenues.

“I am a very staunch opponent of using savings to pay for anything, whether it be a tax cut or more spending,” Paxton said.

Eliminating the state’s portion of the sales tax on groceries last year also dug into state coffers to the tune of about $450 million for a full year, he said.

“So, if we didn’t have the grocery sales tax cut, we wouldn’t be underwater,” Paxton said.

Likewise, House Speaker Kyle Hilbert, RBristow, said he would like to do a tax cut, but the state must pass a responsible budget.

House Minority Leader Cyndi Munson, D-Oklahoma City, said under Stitt’s predecessor, former Gov. Mary Fallin, that lawmakers had to raise taxes to stabilize state coffers.

“I don’t see why we would want to take ourselves back to that position, especially when there are so many needs still for Oklahomans when it comes to education, our healthcare system, our roads and bridges and things that are so critical to just living life here in our state,” she said.

Oklahoma Voice (oklahomavoice. com) is an affiliate of States Newsroom, the nation’s largest state-focused nonprofit news organization, supported by grants and donations. Oklahoma Voice provides nonpartisan reporting, and retains full editorial independence.

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