Capitol Insider: Tax Cut Trigger Repealed, New School Grading System Passed

Apr 21, 2017



With a little more than a month left in the legislative session, Oklahoma lawmakers made changes to a tax law and the school grading system this week, and one prominent legislator announced his run for governor.

Repeal of state individual income tax reduction

Senate Bill 170 repeals the trigger for an individual income tax reduction this year. That means even if the state gets the approximately $100 million in additional revenue required to trigger the reduction, it will not go into effect.

If it had went into effect, the individual income tax would have been reduced from 5 percent to 4.85 percent.

Rep. Earl Sears, R-Bartlesville, who co-authored the bill, cited Oklahoma’s budget woes for the change.

“Rep. Sears pointed out that we do have a $900 million shortfall and that the trigger would eat up any growth. Basically what he said is, now is not the time to consider another tax cut,” eCapitol news director Shawn Ashley said in his weekly interview with KGOU.

New A-F school grading system passed

House Bill 1693 establishes an Oklahoma school grading system State Superintendent Joy Hofmeister praises for emphasizing progress more than test scores.

Schools will now be graded on additional indicators. Some of the indicators being added are chronic absenteeism, high school graduation rates and English language proficiency for English learners.

“It focuses on the solution to individual students, which ultimately better meets their need academically and, overall, will raise scores,” Hofmeister said.

Rep. Scott Inman announced run for governor

Rep. Scott Inman, D-Del City, announced his run for Oklahoma governor on Thursday. Rep. Inman is the Democratic leader in the House of Representatives and the second candidate to announce intentions to run. Sen. Connie Johnson, D-Oklahoma City, announced her candidacy in February.


“Some will say that he has already been running for governor as head of the House minority caucus, the Democratic caucus in the House,” Ashley said. “We’ll just have to see what role that plays in his decisions in the coming weeks.”



On the repeal of the individual income tax reduction trigger

Well, currently we’re dealing, of course, with a $900 million shortfall for the upcoming fiscal year. The problem with that is, had there been any revenue growth of more than $100 million in the upcoming fiscal year, that income tax trigger would have been tripped and the rate reduction would have occurred and that would have left them with $100 million less to spend for the next fiscal year. So in other words, as many had pointed out prior to the House’s consideration of the bill, it literally would have eaten up any growth revenue, and any chance of recovery of funds for state agencies that might have occurred.

On revenue raising measures not being passed

We saw five bills pass the joint committee on appropriations and budget this last week, but none of them were major measures to increase revenue. A couple were related to enforcement or the procedure of paying taxes and there was one which would have eliminated a sales tax exemption, the exemption on professional athletic tickets. That bill did pass the House and headed to the Senate, but it looks like that is not going to be heard in the Senate. Combined, we’re talking about less than $25 million of additional revenue.

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