GOP leaders announce support for Texas tax program

(OKLAHOMA CITY) - The Legislature's top Republicans announced support Thursday for a Democratic plan to replace Oklahoma's tax system with the system in Texas.

Senate Minority Leader Jim Dunlap, R-Bartlesville, and House Minority Leader Fred Morgan, R-Oklahoma City, said the plan to eliminate the state income tax and sales tax on groceries would encourage Oklahoma's economy to expand.

``I don't care who gets credit for it. I just want to see Oklahoma grow,'' Dunlap said.

Dunlap said the plan, which would require a statewide vote on a series of constitutional amendments, could be presented to voters this fall.

The Republican leaders also called for an immediate one-half percent cut in the state income tax. The cut would reduce state revenues by $80 million a year.

``To cut the income tax is the best way to stimulate growth in the state,'' Morgan said.

Dunlap had opposed the Texas Plan when it was unveiled last week by Senate President Pro Tempore Stratton Taylor, D-Claremore. Dunlap said Texas has higher property taxes than Oklahoma.

He said he changed his mind after discussing the issue with Taylor, who has said states without an income tax are growing at a faster pace than those with one.

``Upon further research, we see it as a serious issue,'' Dunlap said.

Republican Gov. Frank Keating has proposed cutting the state income tax from 6.75 percent to 3.75 percent over six years. Republicans also have proposed eliminating the grocery tax, a $190 million tax cut.

But Taylor has said that instead of taking a piecemeal approach to tax reform, lawmakers should consider revamping Oklahoma's entire tax system.

``There are a lot of issues in this that we see as opportunities,'' Dunlap said. ``The reform package would have to restructure the entire tax base of Oklahoma.''

The proposal could lead to reform of Oklahoma's estate tax, which is higher than the federal tax, and give local school districts more authority to raise revenues locally as well as more control over how state education revenues are spent, Dunlap said.

Dunlap said he is pleased that Taylor has finally accepted what Republicans have claimed for years: ``Income taxes discourage growth.''

``It takes a true statesman to change course and I offer my highest compliments to Sen. Taylor for joining our team,'' Dunlap said.

Taylor welcomed GOP support for the tax reform plan.

``I am hopeful that we can work together to put the Texas Plan to a vote of the people, instead of tossing partisan barbs at one another,'' Taylor said.

Researchers at the University of Oklahoma and Oklahoma State University are studying how to duplicate the Texas system including personal and corporate income tax, sales taxes and exemptions, property taxes, franchise taxes and other business taxes.