Ahead of a new legislative session with fresh leadership, Gov. Kevin Stitt is once again making his case for tax cuts. 

During a Jan. 29 press conference, Stitt said he plans to push for a 0.5% reduction in the state’s personal income tax rate with a “path to zero percent.” House Speaker Kyle Hilbert and Senate Pro Tem Lonnie Paxton have said they support the idea of a tax cut but haven’t elaborated on details. 

“Let’s leave it to individuals, churches and nonprofits to spend it,” Stitt said, adding that the state has saved around $4.6 billion to strategically invest and keep for a rainy day. 

The push for income tax cuts comes less than one year after the Legislature eliminated the state portion of the grocery sales tax. Additionally, several state agencies are asking for additional funding to fix infrastructure or increase salaries. 

The Oklahoma Policy Institute issued a statement after the press conference opposing Stitt’s proposal, arguing that modernizing existing tax credits would be more helpful to low and middle income earners. The think tank also cited a January 2024 report from the Legislative Office of Fiscal Transparency that found the state would struggle to weather anything more than a mild recession. 

A 0.5% tax cut would eliminate approximately $550 million from state revenue, comparable to the annual operating budget of the Department of Corrections. The state would have to make up more than $5 billion of lost revenue if it eliminated the state income tax entirely. 

Expect tax policy to be among the topics discussed at length during Stitt’s State of the State Address this afternoon. The Legislature will officially convene at noon, with Stitt’s remarks expected after 12:30. OETA will offer a live stream of the event. 

For a breakdown of Stitt’s remarks and the Democrats’ response, check the Oklahoma Watch website later today. We’ve also been covering criminal justice, democracy and education bills to watch during this year’s session. 
Have thoughts or questions? Let me know at Kross@Oklahomawatch.org. 

— Keaton Ross

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