Tax Cuts, Workers’ Comp Top Oklahoma GOP Agenda

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Republicans enjoying a tighter grip on the Oklahoma Legislature say they hope to cut taxes, overhaul the workers’ compensation system and increase school funding when the 2013 session opens today. Doing so, they say, will improve the state’s business climate.

The GOP holds a 72-29 majority in the House and a 32-16 edge in the Senate – both the largest Republican majorities ever – and the governor is also a Republican.

“Our policies have been working,” Gov. Mary Fallin said. “Our economy is thriving, and I do think it is in large part because of the legislation we’ve passed that is more business-friendly, more job-friendly.

“We’re going to continue to put our foot on the gas pedal to move Oklahoma to an even stronger, more prosperous time.”

Fallin will deliver her State of the State speech this afternoon and intends to highlight the state’s job growth as it emerges from a recent recession – and ask for more pro-business changes.

Last year, she failed in her bold move to slash the state’s income tax rate and gut various exemptions and deductions. She intends to make a simpler request this year.

“We’re looking at trying to get a tax cut through this year, but one that we can afford and one that is responsible,” Fallin said.

New House Speaker T.W. Shannon, R-Lawton, and Senate President Pro Tem Brian Bingman, R-Sapulpa, both said they could support a responsible income tax cut. Shannon said Oklahoma’s economy has grown and income tax collections have climbed since a one-quarter of 1 percent cut to the state’s top rate took effect last year.

“I think (tax cuts) grow the economy and wind up producing more revenue for the state,” Shannon said. “I think you can go too far, too quickly. You can go too deep, too quickly. I think we can be thoughtful about it like we have in the past.”

Shannon’s selection to head the powerful House Appropriations Committee, Rep. Scott Martin of Norman, said he plans to propose another one-quarter of 1 percent cut to the income tax rate, which would drop the rate to 5 percent. Such a cut would cost the state an estimated $125 million annually, according to the Oklahoma Tax Commission.

Based on preliminary projections, legislators this year will have about $7 billion to spread among various agencies beginning July 1 – about $170 million more than last year. The agencies have submitted budget requests seeking $1.4 billion more.

Republican leaders all have said that increased funding for common education will be a priority next year, but it’s doubtful State Superintendent Janet Barresi will get all the money she has requested. During a budget hearing last week, Barresi asked for $40 million in additional funding just to finish the current fiscal year and another $289 million increase in her budget for next year.

Lawmakers have said a priority will be to fund some of the GOP-backed education mandates approved in recent years, including a new A-F grading system for public schools and requirements that students demonstrate reading proficiency before advancing to third grade.

Fallin also has said she plans to propose $16 million in new funding for the Oklahoma Department of Mental Health and Substance Abuse Services and a $40 million boost in revenue to the Oklahoma Health Care Authority to cover an anticipated increase in the number of enrollees in the state’s Medicaid program.

Fallin also has called on legislators to come up with a way to fund needed repairs to the crumbling Capitol building, but Shannon said last week he’s doubtful there is support in the House for a bond issue to fund any infrastructure improvements. Shannon said he will sponsor a bill for a multi-year infrastructure improvement plan for state assets.

“Our plan will be similar to the eight-year transportation plan we introduced last year that allows us to prioritize projects based on need and to pay our way as we go without adding more debt onto the backs of hardworking Oklahomans,” Shannon said.

Democrats, meanwhile, promised to oppose any plans to reduce the income tax and said they also will continue to push Fallin to reverse her decision not to accept an expansion of the Medicaid program offered states under the federal health care law.

“You will hear us on a weekly basis calling on the governor, the speaker and the pro tem to reverse that decision and expand Medicaid,” said House Democratic Leader Scott Inman, D-Del City. “When it comes to actual policy and how it would affect Oklahomans, hardworking families, hospitals, doctors, many of whom are drowning in uncompensated care costs, we believe that the political decision, which outweighed the policy decision, was the wrong one.”