Oklahoma Supreme Court Strikes Down Income Tax Cut

In May, Oklahoma Gov. Mary Fallin (R) signed into law a bill that cuts the state income tax from 5.25 percent to 5 percent on January 1, 2015, with a further reduction to 4.85 percent in 2016 if revenue growth exceeds the amount of the cut. The bill also set aside $60 million each in 2015 and 2016 to make repairs to the State Capitol.

Coupling those two provisions violates the Oklahoma Constitution's "single subject" rule requiring bills to only encompass one topic at a time, the Oklahoma Supreme Court ruled today. Such provisions, which exist in 41 states, are meant to prevent "log-rolling"–coupling an unpopular measure with a popular one and forcing "an unpalatable choice," to quote today's court opinion. The state had argued that a common scheme of managing and apportioning taxes is one subject, such as when states pass budgets containing both tax and spending provisions. The court's decision was unanimous.

The plaintiff also challenged the tax cut bill on the grounds that it violated the ban on multi-year appropriations, that revenue bills originate in the House and be approved by three-fourths of each body, and that no special funds be created. The Oklahoma Supreme Court had already declared the law unconstitutional on single subject grounds, so it did not reach these other issues.

The case is Fent v. Fallin, — P.3d —-, 2013 OK 107 (Docket No. 111847, Dec. 17, 2013).