Governor, Legislative Leaders to Continue Tax Reform Discussions, But Say Property Tax Increases will not be Part of Talks

(Oklahoma City) Legislative leaders and Governor Frank Keating announced today that they plan to continue discussions on the reform of Oklahoma's tax code, but the state leaders made it clear that they would not be pursuing a proposal that involved a property tax increase.

The governor, Senate President Pro Tempore Stratton Taylor and House Speaker Larry Adair recently asked university researchers to help them draft a tax reform program that would eliminate Oklahoma's personal income tax and sales tax on groceries, without cutting vital state services such as education, public safety and transportation.

At the request of state leaders, academicians at the University of Oklahoma and Oklahoma State University drafted a variety of different scenarios for accomplishing that goal, including one that indicated property taxes would have to be tripled to recoup the revenue losses caused by the elimination of other taxes.

The state leaders applauded the professors for doing a thorough job of researching different reform scenarios, but added that they are not interested in exploring a property tax increase.

"It was important for the authors of the report to provide a comprehensive analysis of all possible approaches to revamping our tax system. However, I noted the report's conclusion that it is 'far better, in our view that alternative revenues come from a gross receipts tax than from an increase in property tax.' I agree and want to go on record as opposing any increase in property taxes as a part of this tax reform initiative," said Governor Keating.

"I applaud the unified effort that compiled this report and led to the culmination of the different reform scenarios. However, I can assure our citizens that we will never embrace raising property taxes as an option to recoup the revenue losses that would be caused by the elimination of other taxes. Such a move would simply not be for the betterment of the taxpayers of this state," said Speaker Adair (D-Stilwell).

"We asked the researchers to leave no stone unturned and they did their job well. We appreciate them giving us as many options as possible, but we're not interested in raising property taxes. Oklahomans, especially our senior citizens, have made it clear that they don't want to see aproperty tax hike and we're not going to go against their wishes," said Sen. Taylor (D-Claremore).

The state leaders say the 78-page report compiled by OU and OSU researchers has provided them with a good perspective on tax reform that will help move their discussions forward. They have assigned their respective staffs to take a closer look at the study's recommendations and are soliciting input from fellow lawmakers, other state officials and members of the public.

"My objective in this process is to develop a system of taxation which encourages commercial growth and capital investment. As I have stated time and again, the most important element of this new design should be a repeal of Oklahoma's income tax. The OU-OSU report provides us the means to accomplish this objective. I look forward to beginning work with the
Legislature to create a modern revenue collection model that will make Oklahoma the standard for a 21st century economy," said Governor Keating.

"My legislative colleagues and I look forward to reviewing the alternative tax report. I have made a copy available to each member of the House for their review and look forward to their input and suggestion in the days and weeks ahead," said Speaker Adair.

"I think the study will serve as a good road map to help us get to our ultimate destination - the elimination of the income tax and sales tax on groceries. We have a lot of options to consider and discuss, and that's what we plan to do in the weeks to come," said Senator Taylor.

Legislative leaders are planning to return to the State Capitol for a special session in September to consider action on a tax reform program.