Follow-Up Report on House Bill 2764’s Journey from Capitol to Kitchen Table
Two weeks ago, we brought you news of a bold legislative move at the Oklahoma Capitol— a plan to cut the state’s personal income tax and reshape the tax code. Now, it’s official: Governor Kevin Stitt has signed House Bill 2764 into law, putting that plan into motion.
This follow-up isn’t just a pat on the back— it’s a checkpoint in a much bigger financial mission: one aimed at eliminating Oklahoma’s income tax altogether, one safe step at a time.
WHAT CHANGED?
House Bill 2764: - Reduces the top personal income tax rate from 4.75% to 4.5% starting in 2026 - Consolidates six tax brackets into three— simplifying tax filing for most Oklahomans - Builds in automatic “trigger cuts” tied to state revenue benchmarks - Pauses those cuts if revenues ever fall short
WHAT IT MEANS FOR YOU
For working families, the initial tax cut may only mean a few hundred bucks a year—about enough for groceries, gas, or a weekend road trip. But for small businesses and retirees watch- ing fixed incomes, it’s one less chunk carved out come April.
And if state revenues hold steady? More tax cuts automatically kick in—one-quarter of a percent at a time—until the tax rate hits zero.
WHAT THEY’RE SAYING Governor Kevin Stitt: “This is a responsible way to move toward eliminating the state income tax, without jeopardizing core services. Oklahomans deserve to keep more of their hard-earned money.”
Senate Pro Tem Lonnie Paxton: “This plan rewards growth but builds in guardrails. If revenues drop, we pump the brakes.”
Speaker Kyle Hilbert: “It’s a common-sense approach that makes Oklahoma more competitive while protecting our budget.”
BUILT-IN SAFETY NET
State leaders designed this with caution in mind. While the up-front cost of the cut is estimated at $350 million, Oklahoma’s current $3.5 billion in savings and projected $11.24 billion in revenue for FY 2026 mean the state isn’t betting the farm.
And if future revenues fall short? Trigger cuts are suspended automatically—no political vote needed.
NOT EVERYONE’S SOLD Some critics say the timing is risky. Federal COVID relief funds are drying up, and future Medicaid or SNAP changes could hit the state’s bottom line hard. Others question whether long-term cuts will shift burdens to local governments or schools.
Still, supporters say the trigger mechanism ensures Oklahoma won’t dig a hole it can’t climb out of.
DIDN’T KANSAS TRY THIS?
Some may remember Kansas tried a similar tax-cut plan in 2012—and nearly ran itself off a fiscal cliff. But Oklahoma’s approach is built with brake pedals. Where Kansas slashed and hoped for a miracle, Oklahoma is using trigger based steps that pause if revenue doesn’t hold.
Kansas eliminated taxes for many businesses and slashed income tax rates rapidly without fiscal guardrails. The result was budget shortfalls, downgraded credit ratings, and a rollback of the cuts just a few years later.
In contrast, Oklahoma is moving carefully. HB 2764 includes automatic pause mechanisms, keeps everyone contributing through consolidated brackets, and makes cuts only when state revenue can support it.
“We’re not repeating Kansas,” one lawmaker said. “We’re doing it the Oklahoma way—slow, steady, and with both eyes open.”
WESTERN OKLAHOMA WATCHPOINT With farming operations, small-town shops, and retirees making up a big slice of western Oklahoma’s economy, even a small tax relief can go a long way. But rural folks also know the value of a good cushion— so many will be watching the trigger safeguards as closely as the bottom line.
