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Shawnee Senator Wants To Prevent Automatic Income Tax Cuts, Use Fuel Tax For Teacher Pay

Dec 20, 2016

A Republican lawmaker is calling for a tax increase, and a bill that would keep some further income tax cuts from happening.

State Sen. Ron Sharp, R-Shawnee, wants his fellow legislators to consider a bill that would prevent automatic income tax cuts, The Journal Record’s Dale Denwalt reports:

“We’ve just basically got to the point where there’s no more cutting that can take place without additional revenue,” said Sharp, R-Shawnee. “That’s the tragedy of the situation.”

Senate Bill 13 keeps a trigger that would lower the income tax rate, but it adds a $500 million cushion. If the amount of general revenue growth isn’t greater than the cost of the next rate reduction plus $500 million, the income tax rate remains the same.

As of now, the tax rate is tied to state revenue growth. That $500 million increase in the trigger threshold means Oklahoma would have to see about $600 million in extra cash before the next automatic cut happens.

The Board of Equalization determines the calculation. It meets next week and again in the spring. The board previously certified revenues that triggered an income tax cut beginning in 2016.

“We cannot afford another trigger, because that would hit from $90 million to $140 million taken out of the budget when we’re already strained,” Sharp said. “Can you imagine what would happen if the (Board of Equalization) said we had the amount of money needed for the second trigger to catch in? School districts would have to shut down in April if we make them another cut.”

Sharp also wants to raise the fuel tax by ten cents to help give teachers a pay raise. Sharp says Oklahoma already has some of the lowest motor fuel tax rates in the country, and about 40 percent of revenue now comes from out-of-state travelers.

Every penny, he said, is another $23 million in revenue.

“We could actually provide teachers a pretty good pay increase by using that,” he said.

The money could also be diverted to the Department of Transportation, and lawmakers would reduce ODOT’s appropriation for a teacher pay increase.

“The platform of the Republican Party is to keep taxes low, but I’m a rural Republican,” said Sharp. “I’ve got to keep my schools open. We have to have teachers.”

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