Tax Cuts to Cost $2 Billion

A report from the Oklahoma Tax Commission to Treasurer Scott  Meacham said tax cuts approved over the past three legislative sessions will cut state revenues by $1.3 billion through fiscal 2009 and more than $2 billion through fiscal 2011.

Democratic Gov. Brad Henry proposed several small tax cuts in 2005, and agreed to larger Republican-sponsored tax cut packages in 2006 and 2007 during budget negotiations.

The Tax Commission said the cuts cost the state $57 million in fiscal 2006, $251 million in fiscal 2007, and $455 million this year. The cost will be $548 million for fiscal 2009, which begins July 1, $581 million in fiscal 2010, and $337 million in fiscal 2011.

State tax revenue fell when the Legislature cut the income tax from 6.65% to 5.5 % and phased in an increase of the standard deduction to the federal level over several years. The income tax rate will fall to 5.25% next year if the Oklahoma’s revenue grows by at least 4%.

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