The Senate overwhelmingly passed its latest versions of the Tax Reform Act of 2017 and the Budget Bill during a floor session Thursday evening.
Senate Bill 1017 raises the consumer sales tax from 6 to 6.5 percent with the provision that it will go down to 6.25 percent when the state's personal income tax is reduced by 20 percent. The legislation reduces the personal income tax by 5 percent starting Jan. 1, 2018 and then by an additional five percent each of the next three years if certain economic triggers are met. This results in a potential 20 percent cut in income taxes over the four-year period.
The bill includes a graduated severance tax that has our energy sectors paying more when prices are high and less when prices are low. The legislation gets rid of certain tax exemptions such as telecommunications, communications, transportation and digital downloads, while also providing a $150 tax rebate for those making $10,000 or less per year and a $100 rebate for those making between $10,000-$25,000 per year. Under the latest plan, wages over $150,000 would not be subject to a tax cut.
In total, the bill provides for roughly $82 million in new revenue.
The current Senate budget, laid out in Senate Bill 1018, uses figures and revenue estimates from this latest tax reform bill described above. The result is a $4.35 billion budget that includes Medicaid funding without cuts, lesser cuts to higher education, money for the Governor's Save our State fund and an average 2 percent teacher pay raise.
The Senate is adjourned until tomorrow at 2 p.m.
The Conference Committee for the public employee furlough bill will meet tomorrow at Noon in 208W