The Oklahoma Policy Institute said last week that Oklahoma lawmakers would have had up to $600 million more to spend on education and other programs the last two years if the Legislature had not cut income tax rates.
The institute, which advocates for the poor, said revenue from state income taxes grew 7.5% between fiscal 1992 and 2006, but only 1% in the last two years because of tax cuts approved by the Legislature in 2004 and 2006.
Matt Guillory, executive director of the institute, said lawmakers “have squandered what could have been a real opportunity to create a better educated, healthier, and more economically competitive state.”
The Oklahoma Tax Commission said revenue from income taxes grew by 0.4% in fiscal 2007 and 0.1% in fiscal 2008.
The report from the institute said the wealthiest 20% of Oklahoma households get 73% of the benefit from the lowering of the state’s top income tax rate, an annual savings of about $1,421 per household. The bottom 40% get only a 3% benefit, the report said, for an annual savings of less than $30.
Since 2005, the Legislature has reduced the state’s top rate for individual income taxes from 6.65% to 5.5%. The Legislature also increased the standard deduction for individual income taxpayers.
Individual income tax revenues grew slightly in fiscal 2008, according to figures from the Tax Commission. Its summary for fiscal 2008, which ended June 30, said individual income tax revenues totaled $2.78 billion.