Fallin touts tax reform

February 07, 2012

Tulsa World

By Barbara Hoberock

OKLAHOMA CITY - Gov. Mary Fallin on Monday outlined her plan to reduce and simplify the state's income tax rates.

"Today, I'm asking our lawmakers to join me in an ambitious and exciting undertaking, the passage of a bold tax reform plan that will represent the most significant tax cut in state history," Fallin said during her second State of the State address delivered to a joint legislative session assembled in the House chamber.

The Oklahoma Tax Reduction and Simplification Act would cut income taxes in all brackets, simplify the tax code and move toward elimination of the income tax, the governor said.

The plan would reduce the current tax system from seven brackets to three beginning in 2013, she said.

Couples making $30,000 or less annually would not pay state income taxes, Fallin said. Those making $30,000 to $70,000 would pay a 2.25 percent tax rate.

A husband and wife making over $70,000 a year and filing a joint return would be taxed at 3.5 percent, as opposed to the current 5.25 percent rate.

"Moving forward, tax rates would be cut by an additional quarter point in any year which the state of Oklahoma hits a revenue growth trigger of 5 percent," Fallin said. "That growth trigger gives the state a safety net should we experience another economic downturn."

To pay for the plan, the state would eliminate tax loopholes, credits and other exceptions. It would also be funded from savings resulting from a reduction in government waste and counts on economic growth, she said.

Fallin said her proposed spending plans include supplemental appropriations to increase the number of state troopers, to pay for teachers' health benefits and to improve the underfunded and understaffed Oklahoma Medical Examiner's Office.

"Cities and local municipalities also need our help to recover from extraordinary expenses incurred by natural disasters," Fallin said. "As you know the State Emergency Fund is nearly empty and has a large backlog of several years of expenses. That's not right, so I'm asking you to work with me to refill that fund."

Fallin said she is asking for additional funding for the Attorney General's Office to handle water rights lawsuits.

The governor is also proposing a $50 million bond issue to repair the state Capitol, which is plagued by aging plumbing and electrical systems, among other problems.

"The state Capitol building is currently in a state of disrepair," she said. "It's embarrassing for our citizens to see barricades roping off portions of the Capitol."

In the area of health, Fallin said she signed an order to prohibit tobacco use on all state property. Her budget also rewards schools that serve nutritious foods and promote physical activity.

Fallin said she is proposing more funds to enhance the state's infant mortality prevention program.

The governor noted that 64 of Oklahoma's 77 counties have shortages of health-care professionals, especially physicians who serve rural areas.

"That must change," Fallin said. "To remedy that, I have included over $3 million to establish 40 new doctor residency slots to help increase the number of primary care physicians in rural and underserved areas of Oklahoma."

Fallin, a Republican, also called on lawmakers to send a message to President Barack Obama and Congress that Oklahoma will support a federal balanced budget amendment. Both the state House and Senate are Republican-controlled.