DALLAS - Oklahoma Gov. Mary Fallin is expected to sign a bill that would cut the state's top income tax rate to 5% in fiscal 2016 from the current 5.25%.
Fallin spokesman Alex Weintz said the governor would review the bill passed by the Legislature April 23 before signing it into law. A similar measure passed by the 2013 Legislature was ruled unconstitutional in December by the Oklahoma Supreme Court.
"Reducing the tax rate has always been part of Governor Fallin's plan to make Oklahoma more competitive and create more opportunities for working men and women," Weintz said.
The reduction would take effect in fiscal 2016 if certified revenue projections meet or exceed the certification levels for 2014 collections.
The reduction to 5% will cost the state approximately $200 million in annual revenues when fully implemented.
A provision in the bill could cut the top rate to 4.85% as early as fiscal 2018 if revenue growth by then offsets the projected loss from the lower rate.
Sen. Mike Mazzei, R-Tulsa, said the lower tax rate will be good for Oklahoma.
"I think a lower tax rate tells prospective companies that Oklahoma is ready to compete and open for business," said Mazzei, chairman of the Senate Finance Committee. "It's one more tool we'll have for attracting new jobs and spurring greater economic growth, and that in turn will generate more revenue for core services like education, transportation and public safety."
House Minority Leader Scott Inman, D-Oklahoma City, said the income tax cut would provide scant relief for Oklahoma taxpayers.
"State employees, many of whom qualify for food stamps, haven't seen a pay raise in six years," he said.