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Oklahoma lawmakers debate tax cuts as they decide how to dole out $11 billion

Senate Pro Tem Greg Treat, left, and House Speaker Charles McCall, right.
Legislative Services Bureau
Senate Pro Tem Greg Treat, left, and House Speaker Charles McCall, right.

The Oklahoma State Board of Equalization certified lawmakers will have $11.1 billion in authorized funds for Fiscal Year 2025. That’s money they can allocate to state agencies and programs for that year.

It’s the number Senate Pro Tem Greg Treat said his caucus needed to see before they decided on any tax cuts. Now that he has them, Gov. Kevin Stitt and House Speaker Charles McCall have reiterated their support for those cuts.

Still, an impasse on inflation relief remains. Treat said the state can’t afford both a grocery tax cut and an income tax cut, while remaining fiscally responsible.

McCall said the cards are in the Senate’s hands, as they have been since last year.

“The House has already passed a number of inflationary bills last session that sit in the Senate today,” he said. “They could be brought up for a vote at any time.”

McCall, sitting behind his desk, told huddled reporters about House Bill 1955: a grocery tax cut the House introduced last year that imposes a moratorium on local jurisdictions from raising their grocery tax rates for two years.

The moratorium is the main difference between McCall’s measure and Treat’s Senate Bill 1283. Without it, McCall said Oklahomans could see their grocery bills rise all over again, as local municipalities raise their taxes on grocery items.

Many municipalities already have grocery taxes that would stay in place. Oklahoma City and Tulsa each have a roughly 4% sales tax that would continue to apply to food purchases.

Treat said the authorized budget is encouraging, but it doesn’t show him there’s enough money going forward to justify both tax cuts. Doing so would sacrifice some financial flexibility, he said.

“If we end up doing a grocery tax elimination, as I have proposed, or is the speaker's proposal, either way, it basically eliminates our ability to do new recurring expenditures,” he said. “We want to make sure we leave a healthy balance in cash so we don't spend through those reserves in case we come upon harder times.”

He said eliminating the state grocery tax would mean more immediate inflation relief for Oklahomans and more backup money for the state.

McCall said the income tax cut will protect Oklahomans better in the long run. He said the effects of a state income tax cut are retroactive.

“You’re going to be able to file your taxes based upon a lower rate this year,” he said.

And going forward, he said, with the cut Oklahomans can expect to see a “pay raise” in the form of more money in their checks every pay period that will stay there regardless of where they live.

Lionel Ramos covers state government at KOSU. He joined the station in January 2024 after covering race and equity as a Report For America corps member at Oklahoma Watch, a nonprofit investigative newsroom in Oklahoma City.