At a press conference with grocery store owners at the capitol in Oklahoma City today, Governor Kevin Stitt renewed his call for permanent tax relief. The legislature will return to a special session this week to decide how to spend American Relief Plan funds, and can also take the opportunity to cut taxes.

“President Biden’s inflation crisis is out of control,” said Stitt. Inflation has driven up prices of basic goods, turning the Governor’s tax relief focus to the sales tax on groceries. Oklahoma is one of only seven states that tax grocery staples at the full sales tax rate, a few more tax groceries at a lower rate.

The Governor also said the state has the “largest savings account our state’s ever had,” and explained the state continues to take in surplus revenue. Oklahoma is simply taking in more taxpayer dollars than it should, and Governor Stitt said it is time for government to give that money back – or risk state spending going up across the board.

This is key for two big reasons.

One, often the argument against tax reform is that the government may not have enough money in the future and then there will be some crisis requiring taxes to be increased (in Oklahoma this requires a three-fourths majority vote in the legislature) – but Oklahoma clearly does have the money, and is busy spending federal bailout money.

Two, if the legislature does not put taxpayers first and at least schedule in reductions in the tax burden, the legislature will have extra money lying around and every special interest in the state will be lobbying to have that money spent on them.

Both chambers of the state legislature have approved elimination of the grocery tax at some point this year. There is support for getting this done. Further, the House has passed a number of other tax cuts, including a 0.25% income tax rate reduction.

Legislators concerned with future revenues can support using “revenue triggers” to cut income taxes over time. This means attaching future tax cuts to a yearly revenue benchmark. That way the income tax rate is trimmed by a scheduled amount only when revenues grow enough year-over-year.  

Americans for Tax Reform applauds Governor Stitt’s leadership and persistence in fighting for Oklahoma taxpayers to be the first priority. There is plenty of enthusiasm for relief in the legislature, but the results are simply not there, largely due to the Senate holding up tax cut proposals.