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Policy: Budgets & Deficits

Oklahoma House's top Democrat: No time for tax cut

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Education,Transportation,Associated Press,Taxes,Oklahoma,Budgets and Deficits

OKLAHOMA CITY — The top Democrat in the Oklahoma House said Thursday that legislators shouldn't cut the state income tax this year, citing declining revenue and critical public education and transportation needs.

"This is the wrong time to pass an income tax cut," Democratic Leader Scott Inman of Oklahoma City told reporters shortly after the House adjourned for the long Easter weekend. Proposals to reduce the state's 5.25 percent top income tax rate by a quarter of a percentage point once the state's revenue stream improves are expected to be considered by the Legislature next week.

Inman made the comments a little more than two weeks after as many as 25,000 teachers, administrators and students rallied March 31 at the Capitol to urge lawmakers to restore $200 million in public education funding that has been lost in recent years due to budget cuts.

Officials said public schools are operating with roughly 1,500 fewer teachers than in 2008, despite an increase of about 40,000 students. Educators also called for a pay raise for teachers, which would be their first in seven years.

In addition, lawmakers hope to raise the salaries of state troopers and other state workers while sustaining funding increases for road and bridge repairs that have been approved in recent years.

"We can't do it if we keep cutting back on revenue," Inman said.

Income tax proposals are complicated by a report released earlier this week by Oklahoma's finance secretary that said collections by the state's general revenue fund fell 9.1 percent below the official estimate in March, Inman said.

Secretary of Finance Preston Doerflinger said the decline was largely due to unusually low corporate income tax revenue following a major increase in tax credit claims.

"Oklahoma's economy still shows growth and momentum that has total tax collections continuing to hit historic all-time highs," Doerflinger said. "The catch is a variety of totally noneconomic government policy factors are preventing those collections from being used for state budget purposes."

Republican Gov. Mary Fallin, who is seeking re-election to a second four-year term this year, has said she supports reducing the state income tax. Fallin has proposed reducing Oklahoma's top income tax rate from 5.25 percent to 5 percent as a way to stimulate the economy and create jobs.

"I believe responsibly lowering the income tax is the right thing to do," Fallin said in her State of the State address that kicked off the 2014 Oklahoma Legislature in February. "This is the people's money; it should stay with the people."

The Oklahoma Tax Commission estimates the tax cut would trim $147 million in revenue annually.

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