OKLAHOMA CITY – Despite pressure from the governor, the state Senate will not consider eliminating Oklahoma’s food tax or reducing income tax during the special session of the Assembly legislative, which begins on Wednesday.
Alex Gerszewski, a spokesman for the Senate leadership, said in an email that the chamber plans to act only on bills that pay for projects using federal money from the American Rescue Plan Act and the Progressing Rural Economic Prosperity fund.
He said Pro Tem Chairman Greg Treat, R-Oklahoma City, met with fellow Republicans Gov. Kevin Stitt and House Speaker Charles McCall, R-Atoka, to let them know his chamber would not accept tax cuts and reforms.
Lawmakers are expected to vote to spend nearly $1.5 billion during the three-day special session that runs through Friday. This total includes more than $1.3 billion in federal coronavirus assistance and $250 million in state taxpayer funds that have been set aside to support economic development in rural Oklahoma by making the ready-to-use industrial development sites.
The Republican-controlled legislature has yet to reveal how it plans to spend the economic development funds, but it has earmarked much of the state’s $1.8 billion federal share for dozens of projects. , including improving access to health and child care, improving rural water and broadband infrastructure. and training the next generation of Oklahoma’s workforce.
Stitt, however, also lobbied the state Senate to take inflation-fighting measures, including eliminating the state’s share of the food tax and reducing personal income tax.
In June, the House advanced what members called a “buffet of bills” to the Senate containing more than $500 million in tax cuts aimed at helping Oklahomans — at least temporarily — deal with the soaring fuel and grocery prices as part of Stitt’s comprehensive inflation-fighting agenda.
At the time, House Republicans said it was hard to boast of record surpluses as Oklahomans grappled with inflation rates over 8%, so they embraced a variety of bills that provide state senators with the ability to temporarily or permanently reduce the state’s grocery tax and personal income tax rates.
Local food tax rates would remain intact, although some measures passed by the State House would prohibit municipalities and counties from attempting to raise food tax rates while the state moratorium remains in effect. vigor. Any temporary tax reduction would last for two years. Senators also have the option to increase the state’s grocery sales tax credit from $40 to $200.
Gerszewski said those bills would not be considered.
Instead, Treat plans to allow a tax policy task force, which represents a cross section of the Senate Republican caucus, to meet to find a long-term solution, Gerszewski said.
“We want personal income tax to be as close to zero as possible,” Gerszewski said. “This will be one of our priorities for the next session. The pro tem is in favor of making tax cuts as long as they are done holistically, deliberately and responsibly. The only way to have real reform is to take a thoughtful, long-term approach.
He said Treat had “been through the ups and downs of budgets” and was considered a $1.3 billion shortfall.
“He wants to make sure we’re well positioned to protect taxpayers’ investment during the recession,” Gerszewski said. “He thinks the management of limiting growth over the past few sessions has put us in the position of having a record surplus and never wants to be in the position we were in in 2017 and 2018 again.”
The governor’s office continued to publicly defend the tax relief. On Monday, Stitt wrote on social media that the price of eggs had risen 39%. He said bread and nappies were up 16% and milk 17%.
“Oklahomians are suffering from #Bideninflation every day, and they need real tax relief, right now!” he wrote.
In an email on Monday, his spokeswoman, Kate Vesper, said negotiations to offer tax relief were underway.
“Governor Stitt remains committed to fighting for the taxpayer,” she said. “Inflation is crushing hard-working families, and with our state’s historic $3 billion in savings and a $1 billion surplus expected next year, now is the time to give back the money to the taxpayers to Oklahomans.”
Vesper said Stitt was confident the state could come together and do just that.