Oklahoma Senate approves bill to repeal income tax cut trigger on wealthiest Oklahomans
OKLAHOMA CITY – A bill that would repeal a controversial income tax break that is costing the state hundreds of millions of dollars has passed another hurdle.
Legislation passed in 2014 provided a mechanism to reduce Oklahoma’s tax rates.
Initially, the wealthiest Oklahomans paid 5.25 percent in income taxes. However, the measure dropped that tax rate to 5 percent and provided a mechanism for it to continue to drop to 4.85 percent.
In 2014, the memorandum estimated that the state would lose an estimated $142 million in 2016 and $153 million in 2017 when the tax rate dropped to 5 percent.
It also estimated the state would lose $266 million in 2018 if the top income tax rate is dropped to 4.85 percent.
Since that legislation was passed, state revenues have plummeted and the state faces a budget hole of nearly $900 million.
State finance officials, including Secretary of Finance Preston Doerflinger and Treasurer Ken Miller, have suggested that lawmakers scrap or revise the trigger point until state revenues have stabilized.
Now, the Oklahoma Senate has approved legislation that would repeal that tax cut’s trigger, which would have allowed the tax rate to drop to 4.85 percent next year.
On Monday, the Oklahoma Senate approved SB 170 with a vote of 39-6.
The bill has yet to be heard by the Oklahoma House of Representatives.