MUSKOGEE — State lawmakers should move to stop any new income tax cuts from taking effect until the budget crisis is over and a sustainable revenue approach is adopted.
A state individual income tax cut from 5 percent to 4.85 percent could go into effect this year if tax collections increase by $100 million.
That increase would be enough to cover the tax cut, but not enough to cover the shortfall expected for the next fiscal year budget.
Oklahoma was projected to be $1.3 billion short for this fiscal year ,and state legislators and the governor had to go into crisis mode to offset the shortfall.
The shortfall was not as bad as projected, but the next fiscal year isn’t projected to be rosy.
The state already cut income taxes from 5.25 percent down to 5 percent.
That’s not what created the budget shortfall, but it was a contributory factor.
Oklahoma relies too much on the boom-and-bust oil and gas industry.
When oil and gas prices go up, our state sees the financial benefits.
When prices go down, our state suffers the consequences.
Oklahoma must better diversify its economic drivers to ensure less of a revenue roller-coaster ride.
State leaders must attract industries and businesses that don’t have such an up-and-down portfolio.
The state must smooth out the peaks and valleys of fiscal year budgets before it cuts state income tax.
Most individuals understand a basic concept of budgeting: You don’t cut revenue streams when you are already in the hole.
Tax cuts sound great to taxpayers and voters. That’s why they are as popular as sound bites.
The average citizen will see a barely noticeable increase in take-home pay. Those few dollars per check are not enough to stimulate the economy.
The fiscal reality of our state is that we don’t have enough money coming in to warrant additional tax cuts.
Legislators should acknowledge that and kill the projected individual income tax cut before it’s too late.