Will Grocery, Income Tax Cuts Survive State Budgeting Process?

All eyes are beginning to shift to the budget at the state capitol after lawmakers passed the largest economic incentive in state history.

One looming question: Will legislators be able to follow through on promised tax cuts, as well?

“If the question is, ‘Do we have the capacity to do all of it?” House Speaker Charles McCall, R-Atoka, said. “Absolutely, and we’ll still have significant savings and reserves for the state.”

However, on the other side of the building, Senate Budget Chairman Roger Thompson, R-Okemah, is urging caution. 

“I think this is a year where if we move the money over, that’s where we are to be,” Thompson said. “I think we need to hold even, hold steady, see what the economy is going to do. So, as far as advancing any tax cuts, it’s not at the top of my priority list.” 

Earlier in the session, the speaker discussed an array of inflation relief options including temporarily eliminating the grocery tax, direct $125 payments to taxpayers in addition to personal and corporate tax cuts. 

“The two prevailing issues that we will settle on will either be in the realm of the grocery tax, trying to soften up tax cost for people at the grocery store, or just with personal finances with a paid income tax,” McCall said. 

The Speaker and Senate Pro Tem. Greg Treat, R-Oklahoma City, together have bills that would place a two-year moratorium on the state's 4.5% grocery tax and another to reduce the personal income tax by another 0.25%.

House Democrats have pushed for the permanent elimination of the grocery tax. 

“I think it’s probably one of our top priories,” Rep. Melissa Provenzano, D-Tulsa, said. “We’ve been reassured we have plenty of money, more money than ever before, socked away in savings. This is something that we can do that’s going to impact people in grocery stores tomorrow.” 

Lawmakers must pass the budget by May 27. The Speaker said all signs indicate it should be done a couple weeks before then.