
Budget & Tax
Ray Carter | February 5, 2025
Stitt shows how to cut taxes during ‘down’ year
Ray Carter
When Gov. Kevin Stitt announced that he wants to cut the state’s personal income tax from 4.75 percent to 4.25 percent this year, some officials scoffed.
House Democratic Leader Cyndi Munson of Oklahoma City dismissed the tax-cut proposal, saying the state is projected to have $300 million less revenue this year than last year.
Senate Democratic Leader Julia Kirt of Oklahoma City also waved off the idea that tax cuts are feasible.
“There’s a lot of magical thinking going on,” Kirt said.
So how can lawmakers cut taxes during a downturn? Stitt’s proposed state budget provides an answer: Spend less.
The current 2025 state budget totals $12.4 billion, a dramatic 61-percent increase compared to the $7.7 billion spent in 2021. Stitt has warned that the state cannot continue to grow spending at that rate without creating fiscal problems.
The current 2025 state budget totals $12.4 billion—a dramatic 61 percent increase compared to the $7.7 billion spent in 2021.
Thus, the governor’s budget plan recommends a FY 2026 recurring expenditure base of a little over $11 billion.
Stitt’s budget achieves that lower spending level by removing $1.3 billion in one-time expenditure spending that was included in the 2025 budget, and by removing $163.6 million in one-time expenditures that were included in the FY 2023 and FY 2024 budgets that have not yet been removed from agency base appropriations.
If the income tax is cut by a half-point on Jan. 1, 2026, it would have an estimated impact of $202.6 million in the last six months of the state budget year, according to Stitt’s budget plan.
Stitt’s budget shows that officials have sufficient funding to balance the budget without major cuts to any part of state government, aside from the elimination of one-time funding that was supposed to expire anyway.
At the same time, Stitt’s plan notes spending discipline from FY 2021 through FY 2025 is projected to result in $4.6 billion in state reserves and cash savings at the end of FY 2025 in June. His plan would preserve most of those savings for true downturns in the future.
In an introductory note accompanying Stitt’s budget plan, State Chief Financial Officer Aaron Morris stated, “The recommended budget is balanced, maintains recurring funding levels for government services consistent with the prior year, after certain adjustments, and provides tax relief to all Oklahomans, while preserving state savings.”
In a similar letter accompanying his budget plan, Stitt said the proposal is true to conservative fiscal discipline that will enrich citizens, not government agencies.
“Throughout my administration, my top priority has been limiting the size of government and stewarding the taxpayer dollar well,” Stitt wrote. “The 2026 Fiscal Year will be no different. I call on state government to enact flat budgets and work to streamline and modernize our operations to ensure taxpayers are getting the highest caliber of service in the most cost-effective way possible.
“By enacting budgets that keep government small and easy to navigate,” Stitt continued, “we are setting ourselves up as the most business-friendly state in the nation, and that will pay dividends for generations to come.”

Ray Carter
Director, Center for Independent Journalism
Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.