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TheStreet Open House

New Income Tax Cut Plan Emerges In Oklahoma Senate

By SEAN MURPHY

OKLAHOMA CITY (AP) â¿¿ Divisions between the House and Senate about how to slash Oklahoma's top personal income tax rate became clear Thursday when a new plan emerged in the Senate that would delay a tax cut until 2015 and change five separate tax credits the state offers.

Senate Finance Committee Chairman Sen. Mike Mazzei unveiled the new measure Thursday in his committee, where it easily passed on an 8-2, party-line vote with both Democrats on the panel opposing the measure.

The revised bill would cut the top income tax rate from 5.25 percent to 4.95 percent, beginning in 2015. It also would also eliminate the transferability of five separate tax credits for coal mining, wind power, rehabilitation of historic buildings, energy efficient home construction and railroad modernization. It differs significantly from a plan endorsed by House Speaker T.W. Shannon and Gov. Mary Fallin that would have cut the top rate from 5.25 percent to 5 percent, effective Jan. 1.

Shannon, R-Lawton, said he liked the idea of a deeper tax cut and addressing some tax credits, but he was clearly disappointed with the change to delay the cut until 2015, calling such a move a "travesty."

"I think that's a fundamental step in the wrong direction," Shannon said after being briefed on the changes. "We need to provide tax relief now, not delay it another year."

But Senate President Pro Tem Brian Bingman said delaying the cut until 2015 would provide enough time for the state to finish paying back tax subsidies to the oil and gas industry that amount to about $90 million annually and would be completed by 2015.

"That revenue would be available and help absorb the $170 million impact for the second year on the reduction of the income tax," said Bingman, R-Sapulpa.

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