State Senators gave final approval Friday to the largest tax cut in state history, a measure that will lower taxes for state residents by more than $600 million when fully implemented.
Over the next four years, House Bill 1172 XX will lower the top income tax rate and phase in an increase of the Oklahoma Standard Deduction to the federal level – a provision that will mean 45,000 working Oklahoma families will never again have to pay state income tax. The tax package also includes an elimination of the estate tax over the next three years.
“Today we have historically changed the tax structure in our state. By raising the standard deduction and forever tying it to the federal standard deduction, thousands of hard-working middle class families will no longer be disproportionately responsible for funding essential services like education, health care and public safety in our state,” Senate President Pro Tempore Mike Morgan said.
Morgan also praised completion of a $7.1 billion spending package for Fiscal Year 2007 by the Legislature Friday. The budget agreement includes a $3,000 across-the-board raise for every public school teacher in the state and a $130 million funding increase for higher education.
“This budget is a victory for middle class families. It will help us keep our best and brightest teachers in Oklahoma and prevent double-digit tuition increases that would price a college education out of the reach of middle class families,” Morgan said.
The Senate Leader praised Democrats in both the Senate and House for being willing to hold out amid sharp criticism to ensure that the increase in the standard deduction and a $3,000 across-the-board pay raise for public school teachers were part of the final budget tax cut and budget package.
“It’s unfortunate that we have had to write the budget in special session. Had Republican leaders in the House been willing to do the right thing for Oklahoma a month ago we could have completed the appropriation process on time,” Morgan said. “This budget, however, was worth fighting for and I am proud that Democrats stood up for the Middle Class in Oklahoma.”
The FY 2007 state budget also includes a 5-percent pay raise for state employees and a pay raise for school support personnel. Additionally, Senate Bill 80X includes a pay increase for state law enforcement officers and a record $456 million appropriation for the Department of Corrections.
“Government has no greater obligation than to ensure the safety and well-being of its citizens, that is why Senate Democrats made ‘creating a safer Oklahoma’ one of our top legislative priorities,” Morgan said. “The budget passed today will make Oklahoma an even safer place to live, work and raise a family.”