Pauls Valley, OK, Pauls Valley Democrat

February 6, 2012

Fallin highlights more cuts to Oklahma income tax

Sean Murphy
AP-Associated Press

Oklahoma City, Oklahoma — Oklahoma Gov. Mary Fallin provided more details of her plan to cut the personal income tax for all Oklahomans during her State of the State address to lawmakers on Monday, but had few specifics on how she plans to pay for the ambitious proposal.

Fallin kicked off the 2012 legislative session by outlining her plan to streamline the state's tax code by consolidating the number of individual income tax brackets from seven to three and providing an income tax break for all Oklahomans.

"Our plan is a game-changer for Oklahoma. It's a job creator," Fallin said in prepared remarks. "And it provides broad-based tax relief to the middle class without starving government or hurting the working poor.

"It will give Oklahoma the lowest income tax rate in the region besides Texas, making us a more competitive state for those looking to move jobs here."

Fallin estimates the net cost of her proposal is $103 million for fiscal year 2013, which begins July 1.

Under her proposal, couples earning $30,000 or less would pay no income tax, while the rate for couples earning $30,000 to $70,000 per year would be taxed at 2.25 percent. Those couples earning $70,000 or more would be taxed at the state's new top rate of 3.5 percent. Oklahoma currently has seven tax brackets ranging from 0.5 percent for single taxpayers earning $1,000 or more in taxable income to the top rate of 5.25 percent on taxable income of more than $8,701.

She says the revenue lost through the income tax reduction will be offset by eliminating "loopholes, carve-outs and other exceptions," although the governor's office did not immediately release details on which exemptions would be eliminated. Other savings are projected through further efforts to consolidate state government and by "capitalizing on economic growth we expect to see as a result of our pro-jobs, pro-business policies."

"Send this plan to my desk and let working families keep more of their hard-earned money and provide a higher quality of life for all Oklahomans," she said.

Fallin also is asking lawmakers to provide supplemental funding this year for a handful of projects, including a new Oklahoma Highway Patrol trooper academy, money to fund teachers' health benefits and additional funding for the state medical examiner's office. She also wants lawmakers to replenish a fund the state uses to help local municipalities pay for emergency services that result from natural disasters.

Fallin also decried the state's poor health rankings and said she plans to sign an executive order to prohibit tobacco use on all state property. She said she plans to close a smoking room at the state Capitol and convert it into a small fitness center.

"There are several major factors that hurt our health ranking: obesity, tobacco, poor nutrition, infant mortality, substance abuse and lack of physical activity, just to name a few," Fallin said in her prepared remarks. "It's time to address these problems, move the numbers in the right direction and take control of our own destiny."



Copyright 2012 The Associated Press.