OKLAHOMA CITY — A major overhaul of Oklahoma’s workers’ compensation system and revisiting plans to reduce the state’s personal income tax are among the top priorities for legislative leaders when they return to the state capitol for the 2013 legislative session.
But Gov. Mary Fallin and President Pro Tem Brian Bingman say the state budget and a possible tax cut hinge largely on whether Congress is able to avert the looming fiscal cliff and the resulting automatic federal spending cuts that are scheduled to take place Jan. 1.
“There’s a lot of uncertainty in Washington right now, and that uncertainty can affect Oklahoma and our economy,” Fallin said Friday. “In general, we do plan on making a proposal for lowering our income tax. We’re still debating what that proposal will be in light of the discussions going on in Washington.”
Fallin will lay out her priorities for the 2013 session in her State of the State address when the legislature convenes during the first week of February. Although she declined to reveal specifics, Fallin said she will continue to push to create the “best business climate possible,” including changes to the workers’ compensation system and more efficient state-government operations.
During her State of the State speech at the start of the 2012 session, Fallin laid out an ambitious proposal to slash the state income tax from 5.25 percent to 3.5 percent, beginning in 2013, and then continue to cut the rate by one-quarter of 1 percent each year that certain revenue growth triggers were met.
But that proposal began to get sidetracked when lobbyists fought to keep in place dozens of exemptions and deductions that would be used to make up for the lost revenue. At the end of the session, Fallin and legislative leaders reached a tentative agreement on a more modest reduction from 5.25 percent to 4.8 percent, but even that deal fell apart in the waning days of session, and Fallin ended up with nothing on the tax-cut front.