Gov. Kevin Stitt called on lawmakers to cut Oklahoma’s personal income tax by a half-point, restrain spending, and preserve state savings in his annual State of the State address.

“We have a mandate to support and pass conservative, limited-government legislation that makes the American Dream possible for all four million Oklahomans,” Stitt said.

The governor’s plan would cut Oklahoma’s personal income tax rate from 4.75 percent to 4.25 percent. He also urged lawmakers to adopt a plan that would gradually eliminate the income tax entirely in future years. Most proposals to eliminate the tax involve using growth revenue to offset future rate reductions until full repeal is achieved.

“We need to ask ourselves: How big should government be?” Stitt said. “States like Texas and Florida, they spend less per person than any other state. They also have no income tax. And you don’t hear anyone complaining about their roads, their schools, or their hospitals.”

He also noted that Oklahoma is falling behind other states and currently has a higher personal income-tax rate than many of its competitors.

“States all around us—Nebraska, Missouri, Arkansas, Colorado, even Louisiana—are cutting their income taxes and have lower rates than we do,” Stitt said. “If we don’t act quickly, we are going to be left behind and we’re going to be considered a high-tax state. So I’m calling for a half and a path—a half-point cut to the individual and the business income tax and a path to zero income tax.”

Oklahoma’s current 4.75 percent personal income tax rate is among the highest in the region.

Texas has no personal income tax while Colorado imposes a 4.4 percent rate most years and recently provided a temporary reduction to 4.25 percent. Officials in Arkansas have cut their rate to 3.9 percent. The top rate in Missouri fell to 4.7 percent in January, leapfrogging Oklahoma. Louisiana has cut its income-tax rate to 3 percent and has a “trigger” law in place to further cut the rate as revenue increases in future years.

Among bordering states, only Kansas and New Mexico have higher personal income-tax rates than Oklahoma.

Stitt noted that various sources have ranked Oklahoma a top 10 state for business, number four for GDP growth, number two in lowest cost of doing business, number eight in net migration to our state, and fourth in education freedom.

The best way to keep the state’s momentum going, he said, is to be fiscally conservative. While he noted that many proposals to increase government spending may have surface appeal, allowing government spending to grow too fast has significant negative impact in the long run.

“The reality is there is going to be pain either way—the pain of discipline now, or the pain of regret later,” Stitt said.

When Stitt was first elected, state government had almost no savings. Since then, savings have reached historic levels. The governor called on lawmakers to leave most of those reserves intact so that future downturns can be easily addressed.

“Let’s not go back to 2018,” Stitt said. “I want to set a savings floor of $4 billion dollars to ensure we can weather any financial storm. It’s conservative policies like this that protect the American dream in Oklahoma.”

The governor also encouraged efforts to reduce the size of state government today.

“For years, I’ve instructed my cabinet secretaries, my agency directors, to shrink employee count and cut unnecessary contracts,” Stitt said. “I am committed to having fewer state employees at the end of my term than when I took office in 2019.”

In addition to addressing tax and spending issues, Stitt endorsed several other policy initiatives in education and the state corrections system.

He specifically endorsed a bill filed by Senate President Pro Tempore Lonnie Paxton, R-Tuttle, that would prohibit state schools from using virtual or distance-learning days outside of weather emergencies or similar events.

Virtual days often involve little student-teacher interaction or meaningful schoolwork, but many districts continue to build them into the calendar year, regardless of weather disruptions.

“I’ve had parents from all over the state reach out to me with concerns about virtual school days,” Stitt said. “In some places in Oklahoma, kids are only required to be in their seats for 148 days a year. For comparison, Kansas students are in their seats for 186 days a year. We all know that kids learn best when they’re in the classroom with our great teachers. It’s just common sense.”

Stitt also endorsed efforts to ban cell phones during the school day for K-12 students.

The governor also called on lawmakers to reform the state’s correction system so that former inmates do not face insurmountable bills from fees and fines when they re-enter society. He cited the experience of John Standfill, who served 15 years in prison and today works with OSU’s Oklahoma City Center for Social Innovation. Standfill still owes nearly $30,000 in fines, fees, and court costs.

“It’s time to reform this system and get rid of what is essentially debtors’ prison,” Stitt said.

The governor noted Oklahoma has closed four prisons in recent years, “saving Oklahoma taxpayers hundreds of millions of dollars.”

A commitment to fiscal conservatism, combined with a dedication to protect the “Oklahoma way of life,” will allow Oklahoma to be a national leader that attracts dreamers from across the globe, the governor said.

“I want Oklahoma to be known around the world as the state where businesses come because they know that they can operate freely without fear of gotcha bureaucrats or burdensome regulations,” Stitt said. “The state where parents have the freedom to educate their children in line with their values. The state where families flock because they know their kids can grow up in a safe, hopeful environment, The state where neighbors care for each other and there is always hope for tomorrow. Oklahoma is a haven. A shining city on a hill. And the American Dream is alive and well in Oklahoma.”

Conservatives Praise Speech; Liberals Bemoan It

Legislative leaders quickly issued statements of broad agreement with the goals Stitt outlined.

“I look forward to working with Governor Stitt and Pro Tem Paxton to enact many of the priorities the governor discussed today,” said House Speaker Kyle Hilbert, R-Bristow. “We all agree in wanting Oklahoma taxpayers to keep as much of their hard-earned money as possible while being as prepared as possible for future budget uncertainty.”

“Governor Stitt laid out his vision and outlined a plan to move Oklahoma forward in a positive trajectory that we can all agree with,” Paxton said. “The Senate shares his commitment to growing our economy, improving education, ensuring safe, thriving communities and improving the lives of Oklahomans by allowing them to keep more of their hard-earned money.”

Those on the political left took a different view.

State Sen. Julia Kirt, an Oklahoma City Democrat who leads that chamber’s Democratic caucus, dismissed Stitt’s proposals.

“We really didn’t hear anything new,” Kirt said. “We heard a lot of the ideas that we’ve seen from Republicans that are using D.C. think tanks for their policy ideas that they’re copying here.”

She rejected the governor’s call to cut the income tax, decrying Stitt’s proposal as a break “for big business and for wealthy Oklahomans.”

Oklahoma’s top personal income tax rate of 4.75 percent is imposed on income of $7,200 for single filers and $12,200 for joint filers and lower tax rates are imposed for individuals below those thresholds. It’s estimated that more than 80 percent of Oklahomans land in the state’s top income-tax bracket.

In addition, research has shown that median household income in Oklahoma has grown as tax rates declined.

State Rep. Cyndi Munson, an Oklahoma City Democrat who leads that chamber’s Democratic caucus, similarly said cutting Oklahomans’ income taxes would be “irresponsible,” and claimed prior tax cuts caused state budget shortfalls from 2016 to 2018.

“We had a $1.5 billion budget deficit, and that was due to Republican income-tax cuts,” Munson said.

Munson decried Stitt’s call to boost Oklahomans’ take-home pay through income-tax cuts even though she conceded that working families are now “talking about the cost of groceries, the cost of putting gasoline in their cars, the cost of paying rent, everyday expenses.”

House Democrats instead called for very narrowly targeted tax credits that would benefit a small share of Oklahomans.

Both House and Senate Democrats also decried the school-choice programs that Stitt has championed and highlighted in his State of State speech, even though those programs have benefited thousands of working-class families across the state. Thanks to school-choice programs, many children from working-class families can now access successful private schools at a time when academic outcomes are declining in the government-run public school system.

Instead of pursuing Stitt’s proposals, Kirt said state officials need to focus on addressing “barriers” such as “racism” that have caused some individuals to be “left out” of economic gains.

Democrats also objected to Stitt’s call to reduce the size of the state government workforce.

State Sen. Cari Hicks, D-Oklahoma City, decried Stitt’s recent executive order that eliminated remote work for most state employees and required them to be physically present at the office. Hicks said state agencies have leased out former spaces and can no longer accommodate the state government workforce.

“It’s to shrink our workforce,” Hicks said. “I mean, that’s exactly what we’re doing by mandating everyone return to a physical office space.”