Bonds

Oklahoma Senate snubs another tax cut call

The Oklahoma Senate will not take up an income tax cut during a special legislative session next week as it waits for more information about the state’s financial position.

The Republican-controlled chamber will commence and immediately adjourn the session that starts Monday just like it did for an October special session on tax cuts Gov. Kevin Stitt ordered, Senate President Pro Tempore Greg Treat announced Wednesday.

He said the appropriate time to discuss the state’s budget and taxes is during the regular legislative session, which begins Feb. 5.

Oklahoma Senate President Pro Tempore Greg Treat said the chamber won’t take up a tax cut in a special session next week, noting the appropriate time to discuss the budget and taxes is during the regular session, which starts Feb. 5.

Oklahoma Legislature

“During the regular session and only after we have certified numbers from the Board of Equalization, is when we will know how much we have to spend,” Treat said in a statement, calling the special session a waste of taxpayer dollars. “I feel like the governor’s numbers compared to what we are seeing are simply not accurate.”

Stitt, a Republican, touted Oklahoma’s “record-breaking savings and strong economic outlook” when he proposed a 0.25% personal income tax reduction for the special session.

A budget stress test released last week by the state’s Legislative Office of Fiscal Transparency found Oklahoma’s $1.675 billion in reserve funds were enough to manage a mild economic downturn, but were inadequate for moderate or severe downturns. It noted the state has other revenue it can tap, including more than $2 billion in unspent balances from the last three fiscal years. 

Stitt blasted the Senate for once again subverting a special session, pointing to a survey that showed 65% of residents support a tax cut.

“If anything is a waste of taxpayer money, it is the refusal of Senate leadership to give Oklahomans a well-deserved pay raise,” the governor said in a statement.

The proposed tax cut comes amid a trend of declining state revenue, both nationally and in Oklahoma, where gross receipts in calendar 2023 were down 2.8% compared to 2022.

Oklahoma’s tax revenue could be adversely impacted by a case before the state Supreme Court on whether Native Americans who live and work on reservations should pay state income taxes.

A decision by the high court, which heard oral arguments Jan. 17, can come at any time. In a court filing, the Oklahoma Tax Commission said a tax exemption for tribal members would result in “tens of millions of dollars in tax refunds and deprive the state of billions more in future taxes.”

Last year, the state received positive outlooks on its AA rating from S&P Global Ratings and Aa2 rating from Moody’s Investors Service. The outlook revisions cited among other factors Oklahoma’s reserves, which serve as a buffer for volatile swings in revenue.

Articles You May Like

Good luck catching up to Nvidia 
Issuers expected to call $20B to $30B of BABs this year
Global house prices rebound as economists predict turning point
How the AI boom catapulted Nvidia into tech’s big league
Tax attorneys working around Treasury leadership voids