Budget summit meetings have been moving the state budget and appropriation process forward, but lawmakers have yet to reach an agreement on the fiscal year 2025 budget.
TRANSCRIPT
Dick Pryor: This is Capitol Insider - taking you inside politics, policy and government in Oklahoma. I'm Dick Pryor with Quorum Call publisher Shawn Ashley. Two weeks are left in the legislative session and there is still no budget agreement. Shawn, are budget negotiators making progress?
Shawn Ashley: Yes, they are. Negotiators have been going agency by agency, line by line, and proposal by proposal through the House and Senate budget plans. In some cases, they've easily reached agreements trimming some funding here and adding a bit of funding there. In other cases, there's been some horse trading, with one side agreeing to reduce funding for one proposal in exchange for increased funding for another, and in other instances, they have created new budget items out of whole cloth. And in other cases, they've agreed to disagree because they were so far apart and neither side was willing to move toward the other.
Dick Pryor: There have been six “budget summit” days called by the governor for discussions between the governor's office and House and Senate leaders. How has the budget summit concept differed from the usual late session budget writing process?
Shawn Ashley: I don't think the process itself is that different. My understanding is that previous negotiations have also gone line by line through the two sides’ proposals. What's different about this year's negotiations is that they are taking place in public. The public has been able to watch live streams of all the sessions, and reporters have been allowed in the room. In fact, the videos of those sessions are available on Governor Kevin Stitt’s You Tube page and the Senate's website.
Dick Pryor: You mentioned earlier there's disagreement. Senate President Pro Tem Greg Treat has held firm against an income tax cut. He's adamant that the only tax reduction will be elimination of the state grocery tax, which was passed and then approved by the governor earlier in the session. Why is Treat maintaining opposition to an income tax cut, and why are Stitt and McCall so strongly pushing it?
Shawn Ashley: Treat is concerned about the revenue impact of an individual income tax cut, particularly in light of other tax changes taking place and that impact in future years. For example, the state treasury will fill only ten months of the revenue impact from eliminating the state sales tax on groceries in fiscal year 2025. Since the reduction does not take effect until late August. That will increase in fiscal year 2026. The impact of the Parental Choice Tax Credit, which provides tax funds to qualifying families with children in private schools, also increases in fiscal year 2025 and 2026. Stitt and McCall described their latest income tax proposal as a pay raise for working Oklahomans since it would eliminate income tax on $13,500 of income for a single person and $27,100 for married couples. They also argue decreasing state revenue by implementing an individual income tax cut would help slow the growth of government spending in future years.
Dick Pryor: The ongoing debate over an income tax cut has gotten contentious, and we've seen it out in the open.
Shawn Ashley: Oh, that's certainly true. During one session for more than an hour, Governor Stitt and House Speaker Charles McCall badgered Treat, trying to get him to agree to an individual income tax cut proposal. He would not do so. At one point when pressured by Stitt, he slammed his fist on the table and said, “no,” he would not go that direction. When asked by McCall only a few minutes later if that was something the Senate would take up, he again said adamantly, “no.”
Dick Pryor: So, knowing the income tax cut is still a huge sticking point, how close are negotiators to getting their work done by the time the session must adjourn on May 31st? Could this blow up the whole budget?
Shawn Ashley: It could. McCall said during the first meeting, the House would not move to Senate positions unless the Senate put up the income tax for a vote. It's not going to do that. So, McCall could scuttle everything before they get to a final agreement. And Governor Stitt? He would not promise to sign the budget when asked by Treat if it did not include an income tax if he would veto it. So, there are some moving parts there that could end the whole agreement.
Dick Pryor: All right. Thanks, Shawn.
Shawn Ashley: You're very welcome.
Dick Pryor: And that's Capitol Insider. Until next time, with Shawn Ashley, I'm Dick Pryor.
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