A state board of elected officials has voted to slash Oklahoma’s top income tax rate by one quarter of 1%.

The State Board of Equalization on Tuesday determined state revenue collections grew by more than 4%, enough to trigger a reduction in the state’s income tax rate from 5.5% to 5.25% for the 2012 tax year.

Despite an estimated hole in the state budget of $500 million, Republican Gov. Mary Fallin says she’s "thrilled" that Oklahoma’s economy grew enough to trigger the tax cut. Fallin says she’s convinced the lower tax rate will help lure more businesses to the state, which in turn will help spur additional economic growth.

Once fully implemented, the reduced tax rate is expected to cost the state about $120 million annually.