ABC News 2: Institute says quarter percent income tax cut would save most Oklahoma residents about $39 a year
media mentionPosted: 04/13/2013
By: Max Resnik
TULSA – According to the non-partisan, non-profit Institute on Taxation and Economic Policy, the proposed income tax cut currently being discussed by Oklahoma Gov. Mary Fallin and legislative leaders would add little cash to the pockets of Oklahomans.
Much of the discussion has involved reducing the income tax from the current rate of 5.25 percent to 5 percent, a quarter of a percent cut.
That cut, according to Institute on Taxation and Economic Policy , would mean an extra $39 a year for median income earners, who are making less than $53,200.
The greatest benefit would be given to the state’s top 1 percent of income earners, those making upwards of $393,000. They would see a yearly income increase of $1,870.
Income taxes make up a third of Oklahoma’s revenue and play a role in funding for things like road construction projects, public safety and education.
Some of the most negative effects of an income tax cut, according to David Blatt, director of the non-profit independent think tank Oklahoma Policy Institute, would be levied against education. Blatt says further cuts could lead to larger class sizes and fewer teachers.
According to the Center on Budget and Policy Priorities, Oklahoma is among the states that have cut the most money in per-student spending. Since 2008, Oklahoma has decreased per-student spending by 20 percent .
Tulsa Public Schools superintendent Dr. Keith Ballard says he’s opposed to any income tax rate cuts.
According to Ballard, TPS has cut 300 teaching jobs since 2008 and has seen $22 million less from the state in funding.
“Education funding in Oklahoma has been decimated. There can’t just be talk and say, ‘Well, we support core services but we also support any income tax cut.’ They’re incompatible,'” Ballard said.
He says that under the proposed tax cut, TPS would lose at least $8 million more, which could go towards rehiring the teachers lost through cutbacks over the last five years.
“How many teachers could we hire with $8 million? How many raises could we give? How much could we give in raises, if we had that $8 million? This is a serious issue that impacts education in a serious and dramatic way,” he said.
“We would like to add teachers back, in a planned manner. We would like to be able to give raises. This is all about classroom teachers, and this is why there has been a huge outcry from parents.”
Blatt estimates $100 – $150 million would be lost from the state’s budget if the quarter of a percent cut would go into effect.
There is some talk that the cut could be greater than a quarter of a percent.
Where Gov. Fallin and the legislative leaders will agree remains to be seen. When it could go into effect is also the subject of continued discussions.