Senate Rejects Henry Proposal; Offers Alternative Tax Cut, Budget Plans

Senate President Pro Tempore Mike Morgan today rejected the state budget proposal agreed to by Governor Henry and Speaker Hiett.

After two days of negotiations and review, the Senate Leader said: “There is no deal.”
The Henry-Hiett tax cut proposal cuts too deep and disproportionately benefits the wealthy. The spending proposals are long on giveways and set-asides for special interests and short on funding for essential services, he said.

“I’m not willing to throw the people of the state of Oklahoma under the bus,” Morgan said.
The plan called for an annualized $320-million tax cut and did not make sufficient investments in the areas of education, health care and public safety, he said.

“Everybody wants a deal, but in the rush to get a deal we shouldn’t trample the people of Oklahoma,” Morgan said. “As I’ve said before, we are willing to compromise on the issue of tax cuts, but we are not willing to compromise the future of our state in the process.”

Morgan, D-Stillwater, said the proposal advanced by the Governor and Speaker on Monday is, in effect, an effort to dictate budget policy to the Senate.

“The Senate will not be dictated to,” Morgan said. “There is still time to reach a budget agreement but all parties need to be at the table. The Senate has negotiated in good faith throughout the session and we will continue to do so.”

Morgan also released an alternative tax cut proposal and outlined the Senate’s budget priorities.

The Senate tax cut proposal includes:
- Lowering taxes for all Oklahomans by increasing the state’s standard deduction to the federal level;
- And eliminating the estate tax.

When fully annualized, increasing the standard deduction will reduce taxes by $172 million. Under this plan, Morgan said, the vast majority of Oklahomans will receive a larger tax cut than they would under the $255 million plan proposed by the Governor.

For example, if we increase the standard deduction to the federal level, a family of four with an adjusted gross income of $50,000 would realize a tax savings of $532. That same family of four, would save only $173 from the lowering of the top income tax rate to 5.5 percent, Morgan explained.

The latest estimate by the Oklahoma Tax Commission is that eliminating the estate tax has an annual cost of $66 million.

Senate Budget priorities include:
- A $3,000 across the board raise for teachers at a cost of $137 million;
- A pay raise for public school support personnel at a cost of $18 million;
- $130 million funding increase for higher education;
- A minimum 5-percent pay raise for state employees at a cost of $45 million when fully annualized;
- Investing an additional $25 million a year into the Oklahoma Teachers Retirement System for the next 20 years;
- $20 million to fund maintenance needs at Oklahoma’s state parks.
- And an additional $50 million investment in our state’s roads and bridges.

“Our first priority has always been to make a significant investment in education this year. We believe every teacher should get a raise and we want to ensure that all of Oklahoma’s colleges and universities – especially the regional and two-year colleges – are adequately funded. We also believe an increase in higher education funding of this amount can forestall tuition increases,” Morgan said.