Gov. Kevin Stitt and legislative leaders on Thursday met for a second day of public budget negotiations where tax cuts figured in prominently.
House leaders and Stitt floated the idea of flattening the state’s tax brackets to benefit those earning $27,100 or less who would pay nothing.
They also proposed tying an additional .25% drop in the top tax bracket, which is 4.75%, to revenue growth and creating a path to elimination.
Senate President Pro Tem Greg Treat, R-Oklahoma City, and his caucus have been opposed to additional income tax cuts after agreeing earlier this session to eliminate the state’s sales tax on groceries. That cut is expected to reduce state revenue by about $418 million a year.
Treat asked what the House was willing to cut in ongoing expenses to fund an additional tax cut.
Treat said the Senate wants the state to have $1 billion in unobligated cash in addition to the contents of the state’s Rainy Day and Revenue Stabilization funds, the state’s savings accounts.
House Appropriations and Budget Chairman Kevin Wallace, R-Wellston, said the state will have a large cash reserve at the end of fiscal year 2024.
Lawmakers and staff passed around spreadsheets and haggled over the interpretation of figures and prior commitments.
The first two and a half hours of discussions appeared to be less strained than Monday’s meeting, where lawmakers traded barbs on who backed out of certain agreements and whether the process was being used as a press conference on tax cuts.
Lawmakers on Thursday joked and laughed throughout the process.
Both sides repeatedly said they were agreeing on more and more funding issues, but differences remained, such as funding a $2,500 stipend for public school support staff.
House Speaker Charles McCall, R-Atoka, said lawmakers last year gave education $700 million more which local districts could have used to fund the stipends. McCall said the price tag to the state for the stipends was $99 million.
Wallace said Senate Education Chairman Adam Pugh, R-Edmond, wanted the state to fund the stipends even though it was not an agency request.
Earlier in the day, Treat met with reporters as he normally does at the end of the week.
He was asked about the upcoming budget meeting.
“You won’t see a final negotiation today,” Treat said. “We still have until May 31… But I do not anticipate walking out singing ‘Kumbaya’ today.”
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