The Edmond Sun

February 3, 2014

SLIDESHOW: Fallin proposes tax cut, bond programs

James Coburn
The Edmond Sun

OKLA. CITY — Gov. Mary Fallin laid out her vision for the state of Oklahoma Monday by giving her 2014 State of the State address to the state Legislature.

The governor called for using bond money to repair the state Capitol, cutting taxes, better efficiency among state agencies, job creation, support for education, the Justice Reinvestment Act, school safety and resisting federal intrusion when it comes to the Affordable Care Act.

State government should not plunge the U.S. further into debt or place Oklahoma on a fiscally unsustainable path by expanding Medicaid, Fallin said. Oklahoma will not be led by Washington, D.C., in the wrong direction, she said.

“Washington has taken every opportunity to raise your taxes,” Fallin said. “We should take every opportunity to lower them.”

People invest in business and spend dollars in the economy to create Oklahoma jobs when tax cuts are made, Fallin said. She called for an income tax reduction that will return $100 million to the state’s economy. Fallin called for a one-quarter of a cent cut in state income taxes.

“Lets take this opportunity to show the country that lower taxes and limited government do work,” Fallin said. “We believe in them for a reason. The Oklahoma way and not the Washington way is the best way to support economic growth and help the middle class, Oklahomans and Americans.”

Secretary of Finance Preston Doerflinger said the $7 billion budget contains $71 million in budget cuts. Cuts would include $47.7 million from the Oklahoma Health Care Authority and $49.4 million from the Regents for Higher Education.

David Blatt of the Oklahoma Policy Institute responded that as Fallin calls for another tax cut, the budget is already $572 million below Fiscal Year 2009 after inflation. Oklahoma has jumped from a budget shortfall in a national recession to an equally serious shortfall of our own creation, he said.

“Especially troubling is that at a time when Medicaid needs new funding just to continue existing services, the governor suggests cutting state funding for Medicaid while continuing to refuse federal funds,” Blatt said.

State agencies have something that most families do not have, Fallin said. State government has $830 million every year in revolving fund accounts.

“Many agencies can’t support critical programs and operations by tapping into these funds,” Fallin said. “State government must be more transparent and accountable in its budgeting. Shedding light on revolving funds will achieve that goal.”

State government needs to attract and retain hard working dedicated employees by compensating them fairly, Fallin said. State employees receive a salary and benefits package that is equivalent to other states, Fallin said. However, the way the state spends money on employees is lopsided, Fallin said.

“Many employees working for the state of Oklahoma have salaries far below the private sector and other states,” Fallin said. “Meanwhile, their health care and benefits are far more generous.”

Fallin said she supports state money going to some employees who are paid below their market value. The current pay system should reward performance over time served, Fallin said.

“New hires within the Oklahoma Employees Retirement System should be moved from the outdated, mid-20th century pensions to a more affordable and flexible 401(k) style benefits used in the private sector,” Fallin said without Democratic applause.

State government is also responsible for preserving its state buildings and assets, Fallin said. The state Capitol has become a safety hazard as the exterior crumbles, she said. Its yellow barriers outside are an embarrassing eyesore, and the electrical system is dangerously outdated, she said.

“You guys, the water stains that you see on the walls downstairs — I have bad news for you — that’s not just water. It’s raw sewage that is leaking down to our basement,” Fallin said.

A bond issue is the best and most realistic way to accomplish repairs of the state capitol, she said as House Speaker T.W. Shannon, R-Lawton, applauded. Last legislative session Fallin signed legislation that coupled state Capitol repairs with tax cuts. The Oklahoma Supreme Court ruled that unconstitutional because legislation is only supposed to deal with one subject.

“The bond issue cannot come at a better time,” Fallin said. “Interest rates are low and most importantly … 41 percent of the state’s bond indebtedness will come off the books by 2018, and over 86 percent will be eliminated over the next 13 budget years.”

In addition, Fallin said Oklahoma’s schools are being made stronger and safer. The two elementary schools that were decimated by 2013 tornadoes in Moore are being rebuilt with safe rooms.

Oklahoma is challenged to provide safety in all of its schools, Fallin said. So the Office of Emergency Management is conducting voluntary safety assessments when a school district makes a request.

“Next we need to act to ensure our schools have the means to pay for those upgrades,” Fallin said.

The governor said she supports a constitutional amendment allowing every school district to pursue a one-time increase in bonding capacity to fund storm shelters, safe rooms and protections from dangerous intruders. Local control is the best way to allow school districts to make critical decisions on safety needs, she said.

“We aren’t forcing new taxes on Oklahoma families or businesses,” she said. “We aren’t passing new mandates, but most importantly we are making our schools safer.”