A few weeks ago, the Board of Equalization certified the Legislature will have the authority to appropriate up to $13.96 billion toward the Fiscal Year 2025 state budget, which is $698.7 million, or 5.3% more than authorized for Fiscal Year 2024.
The Board is responsible for carrying out the state’s balanced budget procedures, as outlined in the Oklahoma State Constitution. It certifies revenue collections for prior years, sets expenditure limits for the governor and the Legislature based on currentyear revenue estimates and determines the overall limit on yearly expenditure growth.
Now that the Board has delivered final revenue projections, the process of determining each agency’s budget begins in earnest. Legislators can work together toward crafting a budget that reflects the varied needs and priorities of Oklahomans while ensuring fiscal responsibility and stability.
I consider this certification to be a significant milestone in the budget process. It paves the way for the Senate to take decisive action toward providing tax relief to the people of Oklahoma.
Just last week the Senate passed House Bill 1955 to eliminate the state’s portion of the grocery tax. The Senate’s year-long delay meant Oklahomans paid an estimated $374 million extra, which could have been saved since the House passed the bill 11 months ago.
In addition to eliminating the state’s 4.5% tax, it includes a provision preventing municipalities and counties from raising sales taxes on groceries until June 30, 2025.
HB1955 delivers the most significant single- year tax cut in the state’s history, putting $418 million back in the pockets of Oklahomans. The average Oklahoman will see savings of $105.79 at the grocery store.
Oklahomans will benefit significantly from eliminating the regressive state grocery sales tax, particularly when inflation rates are soaring. By removing the grocery sales tax, we can make it easier for everyone to access affordable food, providing much-needed assistance to those who need it most.
The sales tax reduction will apply to most groceries, but certain items remain taxable. Alcoholic beverages, prepared foods that are heated or prepared by the seller, dietary supplements, and tobacco and marijuana products are still taxable. The sales tax exemption also does not apply to items sold from a vending machine.
The governor signed HB1955 into law on Tuesday, Feb. 27. However, because the Senate removed the bill’s emergency clause, HB1955 is set to take effect in August, 90 days after the Legislature adjourns sine die.
I agree that eliminating the state grocery tax is a positive move; however, we should not consider it the ultimate solution. We still need to take further steps to support the people of Oklahoma, such as implementing a 0.25% income tax cut to provide them with additional relief. Remember, the money paid in taxes belongs to the taxpayers.
Last week was the final week to get House bills out of committee. I had seven bills pass out of committee: House Bill 3065, House Bill 3071, House Bill 3072, House Bill 3073, House Bill 3076, House Bill 3085 and House Bill 3087. I plan to dedicate another column to talk about these bills in more detail.
As always, please do not hesitate to reach out to me with any concerns at 405-557-7302 or neil. hays@okhouse.gov.
Rep. Neil Hays, a Republican, serves District 13 in the Oklahoma House of Representatives, which covers Mc-Intosh, Muskogee and Wagoner County.
