Oklahoma House expected to vote quickly on a massive tax and reform package

Lawmakers return to the Capitol on Monday.

House Majority Floor Leader Jon Echols, R-Oklahoma City, said Tuesday he will bring the Step Up Oklahoma plan to the floor in the lower chamber “early in the session.”

“People are hungry for a solution,” Echols said. “I am not going to put on artificial timelines. We are definitely still interested in dialogue with members that may have concerns.”

The plan calls for raising taxes and making other changes to the tune of about $750 million to pay for a $5,000 teacher pay raise and fund core services. It also includes some reforms, such as letting voters decide whether to reduce the 75 percent supermajority required in the Legislature for a tax increase and to add four years to the 12-year term limit for lawmakers.

The tax increases include adding $1.50 to a pack of cigarettes and 6 cents to a gallon of gasoline and diesel fuel. It also includes increasing the oil and natural gas gross production tax to 4 percent from 2 percent and changes to the income tax structure.

Echols said some of the revenue-raising measures such as the cigarette and gasoline taxes can be put in one bill and would require a supermajority.

Others, such as changes to the income tax, would only need a majority plus one, Echols said.

“The income tax proposal lowers rates and removes deductions as opposed to increasing the income tax,” Echols said.

He said there is a lot of support for the proposal in the House Republican caucus.

“I would like to see that same strong support coming from the Democrat caucus,” he said.

House Minority Floor Leader Steve Kouplen, D-Beggs, said the overall package wasn’t “warmly received” by House Democrats.

“Well, we have been visiting with them (House Republicans) and explaining the concerns we have with different aspects,” Kouplen said.

One of those concerns is making changes to the income tax structure.

House Democrats support raising the gross production tax to 5 percent, Kouplen said.

David Blatt, executive director of the Oklahoma Policy Institute, also had concerns with the income tax proposal.

It would end or limit deductions while adding two new tax brackets and creating a new credit for low-income households, Blatt wrote.

“This approach is unnecessarily convoluted and confusing and would leave over half of all taxpayers earning more than $32,000 per year paying higher income tax,” Blatt wrote. “We also have serious doubts that the proposal would generate anywhere near the amount suggested by the Tax Commission.”

Supporters say 55 percent of filers would see a reduction or no change in tax liability. They also say the changes would generate $144 million.

Blatt suggested restoring the top income tax bracket to 5.25 percent from 5 percent, assessing a high-income surcharge and ending the capital gains tax.

Republicans in the House and Senate found reasons to be for and against the package.

Rep. Carol Bush, R-Tulsa, said she would vote for it, but wished some changes could be made.

Sen. Bill Brown, R-Broken Arrow, gave the proposal a thumbs-down.

“I am not for it at all,” said Brown, who is serving his last year in the upper chamber. “I am heavily against tax increases. That is all this is — a tax increase on the people.”

Sen. Marty Quinn, R-Claremore, also has come out against the plan.

“I am not going to be supportive of it,” he said. “It has way too many taxes associated with that, and there are pieces of it that are good.”

He said he is bothered that some of the business leaders supporting it effectively killed a similar proposal last session.

Sen. Ervin Yen, R-Oklahoma City, supports the package.

“Well, a lot of it is what the Senate passed previously, so I would say I am for it,” Yen said.