Anti-Poverty Group Concerned About Proposed Tax Cuts

Monday, March 19th 2007, 7:52 am

By: News On 6

OKLAHOMA CITY (AP) _ Oklahoma legislators should hold off on further tax cuts while they sort out a range of future financial commitments, a report by a Tulsa-based anti-poverty group said.

Previous tax cuts are hindering the state's ability to invest in priorities needed to support families, businesses and communities, said David Blatt, director of public policy for the Community Action Project in Tulsa.

``The trade-off for pushing ahead with further tax cuts may be felt directly by those who attend public schools and colleges, run a business that depends on a skilled work force and functioning infrastructure or need help with health care and social services,'' Blatt said.

More cuts are being proposed even as the state struggles with billions of dollars in unfunded liabilities in the state teachers retirement system.

Lawmakers also are looking for funding to uphold commitments to raise teachers' salaries, expand access to higher education, repair roads and bridges, and improve the health care system, the report said.

The Oklahoma House passed and sent to the Senate on Thursday legislation to accelerate the state income tax cuts approved last year.

The bill would reduce the state's 5.65% income tax rate to 5.5% in 2008 and 5.25% in 2009.

The rate would be cut in 2009 if revenues grow 4% or more.

The proposal comes in the wake of tax cuts passed during the last three legislative sessions.

Those cuts are estimated to reduce revenues more than $560 million in the state fiscal year that begins July 1, he said.

The report said Oklahomans understand that the state's budget, like a household budget, needs some revenue growth from one year to the next to meet rising costs and emerging needs.

State Rep. Randy Terrill, the author of the legislation to speed up the income tax cuts passed last year, disagreed with the report, saying all evidence indicates that the Oklahoma economy still is strong.

Terrill, R-Moore, said tax cuts stimulate the economy by creating more jobs.

He said any surplus in state revenue is by definition overtaxation.

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