Increased revenue projections trigger tax break
Wednesday, December 17th 2003, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ Oklahomans may get a little extra spending money next year under a law requiring the income tax rate to drop when state revenues increase.
A 1999 law says that when one year's projected revenues are lower than the next year's, the tax rate drops to 6.65 percent from 7 percent.
The improving economy has boosted projected 2005 revenues above 2004 levels. Fiscal year 2005 begins June 30, 2004.
The State Board of Equalization must approve the figures drafted by the Office of State Finance at its meeting Monday for the rate change to take effect Jan. 1.
If the numbers are approved, taxpayers filing a single return on $30,000 will see a savings of $70.
Couples filing joint returns on $50,000 will see a savings of $102, according to the Office of State Finance.
The income tax relief applies to single Oklahomans who pay taxes on $10,000 or more and people filing joint returns on $21,000 or more.
Single people who make less than $12,000 and aren't eligible for the income tax break, will be eligible for a $40 per person sales tax relief credit.
After Jan. 1, people who make less than $15,000 are eligible for the sales tax credit.
Taxpayers with children and a household income of $30,000 also qualify for the $40 sales tax rebate.
Increased revenue projections are good news, but the state is still facing a tight financial picture, said State Finance Director Scott Meacham.
``We're going to have another tough budget year,'' Meacham said. ``It's not going to be as difficult as last year, but we've made all the easy cuts. Now we're going to have to make more and more difficult cuts.''
The impact of decreasing the state's income tax rate and expanding the sales tax rebate will mean the state, already struggling to fulfill agency budget requests, will see $99.2 million less in revenue.
In proposed appropriations figures, state agencies are slated to get about $5.3 million less than they did during the last legislative session.
``We wish the news had been better, but this is precisely why we've been cautioning people not to get overly optimistic,'' said Senate President Pro Tem Cal Hobson, D-Lexington.
``When revenues started exceeding projections...agencies and special interest groups started reminding us of their needs. We know their plight. It doesn't appear, however, that we're going to be able to restore any of the cuts.''