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Senate Party Leaders Split On House's $500M Tax Reduction Proposal

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The Oklahoma Senate has not yet started its budget work in earnest, but it has received a $500 million income tax reduction package from the House to consider.

That includes nearly $200 million in personal income tax reductions through credits equivalent to a 0.25% rate reduction and a five-year phasing out of the corporate income tax, which currently accounts for more than $300 million a year in state revenue.

Senate President Pro Team Greg Treat said the chamber will take a careful look at the proposals.

"We won’t prejudge that. You know, when you look at tax policy, you have to look at it comprehensively, globally, and make sure that we’re in a good financial position," Treat said.

All but one House Democrat voted for the personal income tax bill because it includes a provision making the Earned Income Tax Credit refundable again. Senate Minority Leader Kay Floyd said she has concerns.

"We have a governor that’s talking about discontinuing a revenue stream, with income tax. It’s just like, well, why would we even consider doing that when we don’t have enough money as it is and we’re still reeling from COVID? We still have a lot of bills to pay. We’ve still got Medicaid expansion to put forth, so," Floyd said.

Last week, the Senate passed its own tax bill to restore a vehicle sales tax exemption lifted in 2017. Leaving things as they are would bring in a projected $148 million in fiscal year 2022, when the state needs $164 million to pay for Medicaid expansion.

"We talked about that being temporary at the time, and we need to keep that commitment. It doesn’t concern me at all about its impact on the Medicaid expansion or paying for the Medicaid expansion," Treat said.

Lawmakers suspended the exemption in 2017 to deal with budget shortfalls.

Matt Trotter joined KWGS as a reporter in 2013. Before coming to Public Radio Tulsa, he was the investigative producer at KJRH. His freelance work has appeared in the Los Angeles Times and on MSNBC and CNN.
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