This story has been updated.
Oklahoma Senators passed a state grocery tax cut with a 42-2 vote Thursday.
House Bill 1955, introduced last session by House Speaker Charles McCall, R-Atoka, and carried in the Senate by Pro Temp Greg Treat, R- Oklahoma City, also enacts a moratorium on city and county governments from raising their sales taxes until July of next year.
Treat said the need for fast inflation relief for Oklahomans is dire, and this tax cut is the best way to provide it.
“I landed on the grocery tax because I believe it does impact people at their most basic needs,” Treat said. “Inflation on groceries last year rose by 4%. Oklahomans have seen a greater portion of their check go to groceries, even more so than other states in the union.”
Gov. Kevin Stitt and House Speaker McCall both released celebratory press statements following the Senate’s approval of the HB 1955.
"Today, we get to fulfill a promise to all four million Oklahomans and pass the largest single year tax cut in Oklahoma history,” Stitt said. “Cutting the grocery tax means relief for all Oklahomans.”
The speaker’s remarks were more mixed. McCall blamed the Senate for any delays in passing tax cuts and said the income tax is next.
"This is a truly historic day. With the passage of House Bill 1955, the Legislature has managed to give Oklahomans the largest single year tax cut in state history, returning $411 million to our citizens at a time when they need it the most," McCall said.
That $411 million is the loss of revenue expected by the state after a full year of groceries being tax free. Groceries will still be levied by cities and counties at their local rates.
McCall’s statement continues after he thanks Treat and the Senate for their efforts:
“The delay in the vote cost Oklahomans an estimated additional $374 million in taxes, and the lack of an emergency to immediately put the cuts in place will cost our citizens another $200 million, but Senate leadership did their best to at least secure passage.”
House Democratic leader Rep. Cyndi Munson, D-Oklahoma City, also released a statement in support of the Senate’s vote to cut the state grocery tax. She said the move works to help Oklahomans have more of their money while protecting the state’s revenues.
“I am pleased the Oklahoma State Senate has finally taken action on what we already know will help so many Oklahoma families,” Munson said. “By eliminating the state sales tax on groceries, we are accomplishing a goal House Democrats have been working on and supported for many years.”
Still pending in the legislature are measures aimed at cutting the state income tax by a quarter of a percent, and House leadership are hinting at a strong push to get one of them to the governor’s desk despite Treat’s statements that it wouldn’t happen.
“The House always knew this legislation would pass if put up for a vote, and we feel the same way about the .25% income tax cut,” McCall said. “The House would still like to see a vote taken on the income tax cut legislation that was passed to the Senate in special session, and will continue to explore every opportunity to lower the tax burden for all Oklahomans."
For now, the measure passed Thursday still needs the governor’s signature to become official. That can take days, weeks, or months depending on urgency and political will, although there is a rush to deliver inflation relief. Once signed, the bill would take effect starting in August.
Moratorium causes concern for Senate appropriations leader
The moratorium provision, which McCall said in an interview last week is essential to protect Oklahomans from local tax hikes that would negate the state’s cut, prompted Okemah Republican Sen. Roger Thompson to vote against the measure.
Thompson, who chairs the Senate Budget and Appropriations Committee, said lawmakers have worked in the last decade to ensure Oklahoma’s coffers are full enough to support core services and have extra cash in case of emergencies. He said he supports a tax cut, but not at the expense of local city and county needs to fund much-needed infrastructure.
“Members, because of our history and because of the needs of this state, and because there is a preemptive clause that prohibits Oklahomans who are struggling that they cannot pass a sales tax for a year, I will be a no on this bill,” Thompson said.
He pointed out tattered county roads in his rural district that keep residents from getting to the hospital and cause school buses to slide when the ice sticks in the winter.
He also mentioned rural municipalities are struggling financially to keep their hospitals open. There are at least 22 hospitals at risk of closing in Oklahoma, according to a Feb. 13 report by Chartis, a private healthcare consulting firm.
Treat acknowledged that sales taxes are the primary sources of revenue for rural city and county governments and made no excuses for including the moratorium that worried his colleague.
Instead, he offered a personal anecdote.
“I do the grocery shopping for my family,” Treat said, acknowledging that’s changed since his wife started getting groceries delivered. “I have always tried to go into the grocery store knowing exactly what I'm paying at the register. I play a little game of ‘hey, what can I get for $100?’ That game has changed to ‘what can I get for $200?’ in the last year.
“It’s past time for us to deliver on this.”
