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House takes step to fill budget hole

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OKLAHOMA CITY - The state House of Representatives may not have found a way to fill the state's $878 million budget hole, but it at least shoveled in some dirt Monday.

Lawmakers approved a bill that will cap itemized deductions at $17,000 - a move that's expected to bring in $102 million in revenue next year.

"We're facing a situation that we're getting ready to maybe vote for the biggest tax increase we've ever voted for," said Rep. Steve Vaughan, a Republican from Ponca City. "But, we're also in the biggest hole we've ever been in."

Itemized deductions are things people can write off on their tax returns. Examples include things like medical expenses, property taxes, mortgages and casualty losses.

Lawmakers estimate the bill will cost people who make $100,000 a year an additional $72.

"It's going to stick a finger in one of the holes, and it's going to stop the bleeding a little bit," Vaughan said. "This isn't going to fix it all, but it's the best we can do."

Though Constitutionally, lawmakers are not allowed to pass revenue-generating legislation in the final five days of session, the floor leader told NewsChannel 4 the itemized deduction bill did not meet that description.

Rep. Jon Echols told NewsChannel 4 courts in the past have not interpreted changes to the tax code as revenue-raising measures. As such, the bill only required a simple majority to pass, rather than the three-fourths supermajority standard required of bills that raise taxes, for example.

Still, members of the House questioned whether the bill would hold up in court.

"I do think some of these things that are 51-vote deals may in fact be 76-vote requirements, and this is one of them," said Republican Rep. Kevin Calvey, who opposed the bill. "This is not the right way to balance a budget."

Calvey also criticized the bill's potential impact on the real estate market and everyday Oklahomans who may be trying to pay medical bills or repairs for their homes damaged in storms.

"You don't have to be at all wealthy in order to generate $17,000 of catastrophic medical expenses nor do you have to be uninsured," he said, questioning the state's priorities. "A vote yes on this is just saying we want to tax the people of Oklahoma more just so we can afford our wind subsidies."

The bill must still make it through the Senate and receive the governor's signature to become law.