A budget agreement announced by Oklahoma Republican leaders late last week is moving ahead at full speed.
The House passed Tuesday afternoon House Bill 2900, the $8.8 billion fiscal year 2022 appropriations bill on an 82–19 party-line vote.
The spending plan represents a 14% increase from this year. Republicans tout its $210 million increase over this year for common education and deposits to build state reserves to almost $1.3 billion.
"If you would've told me a year ago when we were passing the general appropriations budget for the FY21 budget that we would be coming into FY22 with the largest savings in state history, I wouldn't have believed you," said House Appropriations and Budget Vice Chair Kyle Hilbert (R-Bristow).
House Minority Leader Emily Virgin (D-Oklahoma City) said taxpayers aren’t looking for elected officials to sock away their money, they’re looking for better services and help with the pandemic’s economic fallout.
"They want us to take care of the needs of Oklahoma, and there are several, many unaddressed needs that we could be taking care of in this budget. And we're choosing not to," Virgin said.
House Bill 2962, which cuts personal income tax rates, also passed 82–19, though two Republicans joined 17 Democrats in voting against it. Hilbert said these aren’t like cuts a few years ago to only the top bracket.
"This bill ... cuts the rate for all taxpayers. Instead of it starting at 0.5%, it will now start at 0.25% and reduces all rates by 0.25%," Hilbert said.
Republican leaders negotiated a tax cut rather than a rate reduction through credits, meaning it will take a three-fourths majority in both chambers to undo it. Rep. John Waldron (D-Tulsa) said the state just turned the corner after years of budget uncertainty brought on by tax cuts that slashed revenues.
"Why are we doing this? Because we think it's good fiscal policy? Or to advance the ambitions of a few politicians?" Waldron said.
HB2962 includes a provision to make the Earned Income Tax Credit refundable again, although at a lower rate than Democrats have been asking for the past several years.
The House also passed House Bill 2960, which reduces the corporate income tax from 6% to 4%. House Speaker Pro Tem Terry O’Donnell (R-Catoosa) said lawmakers need to do something to compete with states that have no corporate income tax, because Oklahoma has lost jobs to those states.
"Sunoco moves to Texas. No corporate income tax. Citgo — we lost 25,000 jobs in the City of Tulsa in 2004. They moved to Texas because of no corporate income tax. Thrifty rent-a-car moved to Florida. No corporate income tax," O'Donnell said.
But Rep. Andy Fugate (D-Del City) cited rankings from the conservative Tax Foundation that have Oklahoma 11th for corporate taxes to Texas’ 47th. Fugate said businesses are paying lip service to the state by considering moving here, then saying what they really think behind closed doors.
"'Your state spends all its time punishing its teachers, outlawing abortion, declaring Second Amendment sanctuaries, passing meaningless resolutions and tilting at 10th Amendment windmills so you can own the liberals. And meanwhile, Oklahomans suffer,'" Fugate said.
The measures now go to the Senate.
