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Benge says tax cuts unlikely

Benge says tax cuts unlikely

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Benge says tax cuts unlikely

by: The Associated Press
Thursday, March 12, 2009

OKLAHOMA CITY — A Senate-passed measure that would eliminate the state sales tax on groceries will get a hearing in the state House, but House Speaker Chris Benge said Thursday it is unlikely that any meaningful tax relief will reach Gov. Brad Henry's desk in what will be a dismal budget year.

Benge said it is also unlikely that state workers will receive their first pay raise in three years as lawmakers work to fill a $900 million budget shortfall that could lead to budget cuts at state agencies.

"I just don't see the revenue there for any pay increases," said Benge, R-Tulsa.

But he indicated he is receptive to demands by the 10,000-member Oklahoma Public Employees Association that lawmakers develop a compensation plan for state employees to address salaries that are 16 percent below private market levels.

"I'm open to it. We're open to looking at anything like that," Benge said.

Benge made the comments as the Oklahoma Legislature met a deadline for passing legislation out of the house of origin. The House has approved more than 400 individual measures, including more than 100 appropriations bills, and sent them to the Senate since lawmakers convened on Feb. 2.

The House will begin working on Senate bills on Monday, including measures that would phase out the state sales tax on groceries over five years and lower the top state income tax rate.

Both bills were approved on bipartisan votes although lawmakers said they are unlikely to become law because of their cost. The grocery tax cut would cost $44 million next year and $300 million when fully implemented. Lowering the maximum income tax rate from 5.5 percent to 5.25 percent would be a $44 million annual tax reduction.

Benge said the grocery tax cut would put money in the pockets of Oklahoma taxpayers and have an impact on consumer behavior. Although it will get a hearing in the House, Benge indicated its future is uncertain.

"I think it will be very difficult to provide any tax relief this year," the House speaker said.

Benge said he expects legislative budget writers to begin work next week on the state budget for the fiscal year that begins on July 1. He said finalizing the budget may be slowed as the state receives more information on how it can spend its share of the $787 billion federal stimulus package.

"We're still getting direction from the federal government," Benge said.

The state is expected to receive more than $2.6 billion from the package. Benge has said the stimulus money will add value to the state, especially a $465 million allocation for road and bridge construction that he said will create jobs in the short term and improve the state's transportation infrastructure.

The state will receive an additional $39 million for transit projects as well as $287 million to fund programs from pre-kindergarten through secondary education, nearly $120 million for community development, Native American programs and efforts to prevent homelessness and $26.2 million for law enforcement agencies.

Copyright © 2009, World Publishing Co. All rights reserved

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