OKLAHOMA CITY - Senate Democrats rejected a budget proposal Wednesday that included the biggest tax cut in state history.

Democratic Gov. Brad Henry and Republic House Speaker Todd Hiett supported the plan that was rejected.

Senate Democrats offered their own plan, which calls for increased spending on education and a tax break targeted to middle- and low-income wage earners.

Senate President Pro Tem Mike Morgan, D-Stillwater, said Henry's plan to cut $320 million in income and estate taxes disproportionately benefits the wealthy and does not provide enough money for essential state services.

"This tax-cut thing is a political game. It's a ploy to get elected," Morgan said. Henry is seeking re-election this year and Hiett is running for lieutenant governor.

"I'm not interested in their political games," Morgan said. "The Senate will not be dictated to."

Rejection of the governor's plan makes it more likely that lawmakers will have to return to the Capitol in June for a special session to write a state budget. The Legislature must adjourn its regular session on May 26.

"We are back to square one on our negotiations," Morgan said. "I'm going to stay here until we get it right."

Henry's spokesman, Paul Sund, said the governor looks forward to reviewing details of the Senate proposal, but he added that Henry will fight for his compromise agenda.

"The governor believes he has placed a workable compromise on the table, one that strikes a good balance between tax relief and state needs," Sund said in a statement released Wednesday evening. "It implements portions of both the Senate and House programs in an effort to meet the leaders of the respective chambers in the middle of the policy debate."

Sund said Henry won't support any effort that ignores economic development initiatives, funding for research and infrastructure needs and excludes a reduction in the state income tax rate.

"The key now is to put aside the overheated political rhetoric, quickly work to resolve differences and move forward with the budget process," Sund said.

Hiett wasn't immediately available for comment.

Henry proposed reducing Oklahoma's top income tax rate from 6.25 percent to 5.5 percent and phasing out Oklahoma's estate tax. The income tax cut would reduce state revenue by $93.2 million in the fiscal year that begins July 1 and about $260 million when fully implemented, officials said.

"We've got a speaker and a governor who are just bent on cutting taxes," Morgan said. "Oklahoma is a low-tax state and we do not believe we need a tax cut."

While rejecting the income tax cut, Senate Democrats agreed to eliminate the estate tax, an annual cut of about $66 million when fully implemented.

They also proposed increasing the state's standard deduction to match the federal standard deduction. The state's standard deduction is $2,000 for a single taxpayer who does not itemize on their income tax forms while the federal level is $5,150.

Increasing the standard deduction to the federal level would save a family of four with an adjusted gross income of $50,000 a total of $532 a year. The same family of four would save only $173 from the lowering of the top income tax rate to 5.5 percent, Morgan said.

When fully annualized, the raising the standard deduction would reduce state taxes by $172 million.

But the focus of the Democrats' plan is increasing spending for teacher pay raises, colleges and universities and roads and bridges.

"Everybody wants a deal, but in the rush to get a deal we shouldn't trample the people of Oklahoma," Morgan said. "I'm not willing to throw the people of the state of Oklahoma under the bus."

The plan allocates $137 million for $3,000 across-the-board pay raises for state teachers, $600 more than Henry proposed. It would also give a pay raise to school support personnel at a cost of $18 million.

The plan would allocate an additional $130 million to colleges and universities, giving higher education its first $1 billion budget. Morgan said that would avoid large tuition increases for students.

The Senate budget allocates an additional $50 million for roads and bridges, $45 million for a 5 percent pay raise for state workers and $25 million a year for the next 20 years to prop up the Oklahoma Teachers Retirement System.

The plan provides no money for the Economic Development Generating Excellence fund, a research endowment that is one of Henry's top legislative goals for the year, or the Economic Opportunity Fund, another of Henry's proposals that would give state leaders additional resources while competing for new employers.

The Senate's top Republican, Minority Leader Glenn Coffee of Oklahoma City, characterized the plan as a "bloated budget proposal."

"Senate Democrats may be angry about the budget agreement between the speaker and the governor, but they shouldn't take it out on Oklahoma taxpayers by blowing through the surplus like they just won the Oklahoma lottery," Coffee said.