Oklahoma taxpayers are on the verge of a huge win.
Late last week, Oklahoma Governor Kevin Stitt line item vetoed a number of measures included in a state budget proposal which passed through to the legislature. With the legislature sustaining the vetoes during their last scheduled session day, Oklahoma is headed for a special session to hash out an agreement on the budget.
The primary reason for this turn of a events was a failure to include permanent tax cuts in the budget. From the start of session, Governor Stitt and many legislators supported permanent income tax relief, and elimination of the sales tax on groceries. Yet, despite the grocery tax elimination advancing out of committees in both chambers, and the House passing income tax elimination overwhelmingly, these provisions were not in the budget passed by the legislature.
With inflation raging and at the top of mind for Oklahomans, and all Americans, grocery tax elimination, and tax relief have been at the top of mind for many Republican-controlled legislatures. In fact, neighboring Kansas passed grocery tax elimination right before Oklahoma legislators advanced their budget proposal.
Meanwhile, more states have cut income taxes this year – following a slate of states reducing their rates last year – including Indiana, Kentucky, and Georgia. Oklahoma was one of the states to reduce taxes last year, but that reform package was mostly focused on corporate rates, slashing it from 6% to 4%.
Oklahomans should be thrilled the Governor has taken this stand in support of permanent relief, rejecting the temporary spending of $75 taxable “stimmy” checks to everyone in the state.
The legislature has a great opportunity to finish work they have already started on these permanent tax cuts. The House-passed income tax elimination bill uses a revenue trigger model to very gradually eliminate the income tax while avoiding unwelcome revenue surprises. Using future growth to cut taxes means legislators do not need a massive pot of existing money to lock in relief for Oklahoma families. Not to mention, income tax reform will bring in more migration, more business, and more economic growth.
Eliminating the sales tax on groceries is a great way to relieve inflationary pressure on Oklahoma families going into the future.
ATR President Grover Norquist applauded the developments, “With around 20 states cutting, flattening, or eliminating their income taxes over the past two years, Oklahoma needs to make serious income tax reform a top priority to avoid falling further behind. Thanks to Governor Stitt’s leadership, the legislature has a second chance to get proven, conservative tax reforms done.”
Special session is scheduled for June 13. There is plenty of agreement between the Governor and legislature, it is a matter of getting the best result for Oklahoma families and businesses. Oklahomans should encourage their legislators to finish the job on tax cuts.