Noting state government has both record savings and revenue far exceeding what is required to maintain existing government services, Gov. Kevin Stitt has renewed his call for passage of major tax cuts this year.

“If not now, when?” Stitt said. “If we don’t cut taxes this year, when are we going to do it? We have the savings. We have a budget surplus.”

Lawmakers have roughly $1.2 billion available this year above and beyond the $9.2 billion required to match current levels of state spending.

In addition, Stitt said the state now has a projected $6.1 billion in savings through a variety of funds. That includes more than $1 billion in the state’s “rainy day” fund, $401 million in the state’s Revenue Stabilization Fund, $1.5 billion in accumulated unspent funds held in reserve from the last three years, and another $2.1 billion from various other funds.

However, the $6.1 billion figure includes $698 million placed in a newly created Large-scale Economic Activity Development (LEAD) Fund. Money in that fund can be used for financial incentives to lure out-of-state businesses to Oklahoma. Stitt indicated an unnamed business entity, believed to be Panasonic, has now signed an agreement with the state that would allow it to claim money from the LEAD fund. However, the company would be paid the $698 million over a 10-year period.

Stitt renewed his call, made during his State of the State address in February, to eliminate the state sales tax on groceries, reduce the state’s income tax rate to 3.99 percent, and reduce the state’s corporate income tax rate by three-quarters of a point.

The combined tax cuts would save Oklahomans $655 million in the pending budget year, and more in subsequent years when the tax reductions will be in effect for all 12 months of the year.

The Oklahoma House of Representatives has advanced several tax-cut bills already this session, and the Senate recently advanced one of those measures from committee.

House leadership voiced support for broad-based tax cuts, saying tax reductions should be prioritized over funding state incentives that target specific, individual out-of-state companies for relocation.

“Currently in Oklahoma we have an overabundance of surplus saved up, and the House knows that is the people’s money,” said House Speaker Charles McCall, R-Atoka. “The House has tried for over a year to get inflation relief to the citizens of Oklahoma, and while we are in favor of economic development, we believe that we must first give the people back some of their own hard-earned money in the form of a tax cut.”

But Democrats have objected to efforts to reduce Oklahomans’ tax burden.

“Tax cuts are not an economic plan,” said state Sen. Julia Kirt, D-Oklahoma City. “Tax cuts do not change our economic growth. There’s no evidence it does.”

A recent policy paper by Tax Foundation senior policy analyst Timothy Vermeer reviewed academic literature on the topic and found that all but one of the studies compiled showed a positive correlation between lower income tax rates and GDP growth, increased chances of upward mobility, and wage growth. Vermeer noted that a “decrease in a tax system’s progressivity is associated with an increase in the real growth rate of wages.”

Stitt, a successful businessman prior to becoming governor, said tax reductions will foster stronger economic growth in future years.

“When we get our economy going, it helps everybody,” Stitt said. “It helps education, roads and bridges, health care. It helps wage growth. And so we have to get this done.”