Stitt and McCall want to see a reduction in the state and corporate income taxes
The governor wants to cut taxes.
So much so that just before the Christmas holiday, stories circulated that said Gov. Kevin Stitt was considering calling the Oklahoma Legislature into yet another special session on tax cuts.
Stitt — a long-time advocate for tax cuts — told reporters he wanted to get a tax cut done before the regular session begins in February “so it’s not jumbled up with all the other policy things.”
Stitt isn’t alone in his wish.
On Dec. 21, House Speaker Charles McCall, who will end his legislative career after the 2024 election, issued a media statement that said he’d filed several bills to reduce taxes in Oklahoma.
McCall, R-Atoka, said he had filed legislation that reduces the personal income tax and the corporate income tax for the next legislative session. McCall, R-Atoka, said the bills are the latest in a series of tax cut plans the House has filed and passed over the last three years.
“Everyday Oklahomans continue to feel the effects of destructive federal economic policies on their wallet, and they desperately need relief,” McCall’s media statement said.
“The House has passed numerous tax cut bills to the Senate during multiple regular and special sessions throughout the last three years, and these new bills represent our latest attempt to get meaningful tax cuts passed and to the governor’s desk. Our state is in a strong position both economically and in regards to savings, so now is the perfect time to pass tax cuts and let the citizens of Oklahoma keep more of their hardearned money.”
Both efforts would follow a short — and controversial — special session held in October for tax cuts. At that time, Senate President Pro Tem Greg Treat encouraged Stitt to attend a Senate hearing and explain just how he wanted those tax cuts done.
Stitt did not attend the hearing, and Treat, frustrated
by what he called a lack of communication from the governor’s office, pushed to adjourn the special session. The special session ended less than 24 hours after it began.
Treat also questioned the wisdom of cutting the state income tax. He said eliminating the income tax would cost state government billions of dollars.
“Are we going to close schools? Are we going to tax oil and gas and businesses more? These are all the questions the governor needs to answer directly to Oklahomans instead of just sending out an ambiguous special session call,” the Senate leader said. “We cannot act until we have more specific details.”
A cut to the Oklahoma grocery tax is on the table
Since then, lawmakers have continued to talk about the need for tax cuts be it income, corporate or, in some cases, grocery taxes. Just about a week before McCall announced his proposals to reduce corporate and personal income taxes, Treat filed legislation that would make food and food ingredients exempt from the 4.5% grocery tax.
At that time, Treat said he wasn’t giving up on reducing the state’s portion of the grocery tax.
“I’ve been wanting to do it for years,” Treat said. “It just hasn’t happened, so I’m going to keep pushing until we’re successful or until I leave the building — one of the two.”
Democrats like the idea, too. State Rep. Melissa Provenzano, a Democrat from Tulsa, told KOKH-25 that lawmakers on both sides want to see the measure become law.
“Thinking about those families that are working to put food on the table, this gets them a little further, you know, down the road and a few more things in their pantry,” Provenzano said. She said the state can afford to lose its share of grocery tax, but added that local governments “should be able to keep theirs to fund services and other essential functions.”
That’s been a big part of the debate over the grocery tax — because cities and towns are almost completely funded by revenue from retail taxes, a cut in the state’s portion of the grocery tax puts pressure on local officials to reduce the local grocery tax. For more than a decade, the Oklahoma Municipal League has pushed back against cuts to the grocery tax.
Senate Budget Chairman Roger Thompson, R-Okemah, said cutting the state’s portion of the grocery tax would cost about $370 million annually. Thompson, like Treat, has pushed lawmakers to take a thoughtful approach to tax cuts, arguing that big cuts now could lead to revenue shortfalls later.
Polls say voters want ‘responsible’ tax cuts
Both Thompson’s and Treat’s efforts echo a poll taken in the fall. That poll, produced by Oklahoma City’s Amber Integrated, showed a majority of Oklahoma voters are concerned that cutting taxes could leave state services vulnerable if the economy weakens. The poll also showed that state voters would prefer a cut in the sales tax on groceries over other options.
The Amber poll also revealed that voters have a deep dissatisfaction across political parties, and independent voters with the education being provided in their local schools.
“Only 31% of those polled said they were very or somewhat satisfied with the quality of education being provided to students in their communities,” the poll said. The poll of 500 likely voters in Oklahoma, was taken during the week of Oct. 6. The margin of error was 4.4%.
Still, while politicians and polls go back and forth over the possibility of future tax cuts, the state’s economy continues to show signs of slowing down.
In August, state Treasurer Todd Russ’ office reported the total revenue collections were down nearly 9% from the same time a year ago. Russ attributed the decline to reductions in collections from oil and gas production taxes.
By October, state tax receipts had dropped by $167 million from the same time last year, Russ reported. “October marks the first time since March 2021 that receipts to the treasury fell below the prior year’s 12-month revenue as expected,” Russ said.
Thompson, the Senate’s budget chair, told Oklahoma Voice he expects lawmakers will only have about $300 million — or less — in recurring revenue to spend next year.
“It’s too soon to talk about cutting taxes,” Thompson said.