TRANSCRIPT
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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. Shawn, Governor Kevin Stitt presented his State of the State address and executive budget last Monday. The centerpiece of his plan for the year is a cut in the individual and corporate income tax rates. How is that being received in the legislature?
Shawn Ashley: House Speaker Kyle Hilbert and Senate President Pro Tem Lonnie Paxton said they want to cut taxes, but they question whether the state can afford it. Both men noted the December revenue estimate forecast a decline in state revenues for fiscal year 2026. They are also projecting more than $300 million in new spending will be needed to meet certain obligations next fiscal year and the full fiscal year effect of just an individual income tax cut is $500 to $600 million, they said. Combined, that would create a $1 billion deficit they would have to overcome. In other words, they are looking at Stitt’s proposal very cautiously.
Dick Pryor: The House Appropriations and Budget Finance Subcommittee wasted little time in diverging from what the governor called for. What direction is that committee taking?
Shawn Ashley: On income tax, Stitt called for a half percentage point reduction and a path to the tax’s elimination. House Bill 1267 eliminates the bottom two individual income tax brackets, which would cut the income tax for those with lower incomes. On the corporate income tax, Stitt also called for a half percentage point reduction. House Bill 1200 modifies the way that tax is calculated, which would reduce the tax burden for many Oklahoma companies, but maybe not as much as the rate cut proposed by Stitt. As Quorum Call’s Sidney Lee wrote, “the subcommittee nibbled around the edges of its tax proposals.”
Dick Pryor: What is the Senate Appropriations Committee doing?
Shawn Ashley: The Senate heard budget request presentations for 73 agencies over two days to prepare for its work making spending decisions. It also heard Thursday from the Oklahoma Tax Commission and the Office of Management and Enterprise Services about the complex process behind the revenue estimates the agencies prepare. And those estimates are now being discussed with some of the members of the Board of Equalization.
Dick Pryor: He mentioned in his State of the State. Governor Stitt is setting up a government efficiency division within the Office of Management and Enterprise Services. Now, this will be similar to the new federal “DOGE” headed by Elon Musk. How is this going to work on the state level?
Shawn Ashley: Stitt will appoint a chief DOGE adviser, someone sort of like Musk, and that person will work with the Office of Management and Enterprise Services, other state agencies and lawmakers to develop recommendations for improving government efficiency and savings. The advisor's first report is due at the end of March. So, this is a rapid response situation. But the office will continue to operate into July of 2026.
Dick Pryor: How is this new state “DOGE” plan being received by legislators?
Shawn Ashley: Well, as you might expect, it depends on the legislator. Republican legislators generally praised it. House Speaker Kyle Hilbert, for example, noted House Republicans had launched a DOGE portal earlier this year to allow residents to make suggestions for government efficiency. Democrats, however, were not supportive. They said Stitt’s DOGE plan, like several of his other proposals, were simply retreads of what President Trump is doing in Washington, DC.
Dick Pryor: What's coming up in the week ahead?
Shawn Ashley: The big deal will be the Board of Equalization meeting on February 14th, where we will see if there are any changes to that FY26 revenue estimate that gives lawmakers the numbers they need to really start working on the budget.
Dick Pryor: Thank you, Shawn.
Shawn Ashley: You're very welcome.
Dick Pryor: For more information, go to quorumcall.online and find audio and transcripts at kgou.org. Until next time, it's Shawn Ashley, I'm Dick Pryor.
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