Revenue Triggers Indicate Tax Cut In 2016

Oklahomans will benefit from much needed tax relief in 2016 after the vote by the Board of Equalization that the revenue triggers in a bill passed by the Legislature and signed into law last session have been met.

With dozens of legislators in attendance, the board approved a motion to certify the income tax cut trigger provisions of Senate Bill 1246. SB 1246 requires a comparison between Fiscal Year 2016 estimated general revenue to the Fiscal Year 2014 certified general revenue total.  Because projected FY 16 revenue is $60.7 million more than FY 14 revenues, the personal income tax rate will be reduced from 5.25 percent to 5 percent in tax year 2016.

“I thank Governor Fallin for encouraging legislators to attend the Board of Equalization meeting to learn more about the certification process,” said House Speaker Jeffrey W. Hickman, R-Fairview. “I am pleased to know that Oklahomans will get to keep more of their hard-earned money through a much deserved tax cut that will put more money into our economy.”

The estimates approved by the board project revenues that could be enough to also trigger a deposit of almost $37.8 million in the state’s Rainy Day Fund. Despite this, the Legislature could face budgetary challenges as the projections approved today are 0.3 percent or $25.6 million less than what was certified for last year’s budget. The recent drop in oil prices, as well as lower prices in agricultural commodity markets could continue to put pressure on state revenues.

“The Oklahoma economy is stable, and I am hopeful the current geopolitical circumstances that are driving down the price of oil are temporary,” said Hickman. “Even though our economy is strong, all entities which receive state tax dollars should be making preparations now in their current budgets for fewer dollars in next year’s budget, just like Oklahoma families and businesses do every day.”


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