By Rep. Mike Sanders
Sitting and listening to Governor Mary Fallin as she gave her State of the State this year, it was clear she was presenting bold proposals in a difficult budget year. The governor is calling for a teacher pay raise, major budget reforms, the completion of the state Capitol project and a personal consumption tax on cigarettes.
She emphasized that this year’s shortfall was an opportunity to fix the way in which we budget state revenues. Over time, legislators have less and less to appropriate despite growing revenues. This year, legislators will only appropriate about 45 percent of total Oklahoma tax receipts, down from 55 percent in 2007.
Governor Fallin asked legislators to automate the reconciliation of agency non-revolving funds from one-time funds to general revenue. These funds, which contain about $1.5 billion, are an example of non-appropriated revenue.
The governor also said the state could bring in an additional $200 million a year by modernizing the way sales tax is collected. Annual sales tax exemptions total $8 billion, while only about 6.9 billion are available for appropriation. There are some exemptions we must protect, including the agriculture sales tax exemption and the property tax exemption for nonprofits that aid aging service providers. No one has yet named either exemption, but I know that there are some who would target those among others. I will oppose the elimination of either of those exemptions.
The governor stated she did not support draining the Rainy Day Fund, nor do I. Without her proposed reforms, Fallin said that most state agencies would face a 13.5 percent cut for the upcoming 2017 fiscal year.
The governor’s proposed $3,000 teacher pay raise will cost the state $178 million. I have also seen proposals filed by legislators for larger amounts. In a budget shortfall year it might be tough, but with the governor’s proposed reforms and other plans being discussed, it might be doable. I will fully support giving teachers a well-earned raise.
Governor Fallin thanked lawmakers for approving legislation two years ago that authorized a $120 million bond issue to begin restoring the state Capitol. She told them it was approved with the understanding that more would be needed to complete the project – current estimates call for another $120 million. Legislators will of course review the full details of any bond proposal, but there is without a doubt a need to ensure the “people’s house” is properly maintained and repaired and a bond issue of some size will likely be approved.
Finally, the governor is proposing to capture $910 million of recurring revenues for appropriations that will help fund core services next year and in the years ahead. That includes $181.6 million from increasing the personal consumption tax on cigarettes.
The governor’s proposals are a good start. More discussion and talks will take place this week and in the next 16 weeks. We will end the session with a balanced budget. My focus will be supporting and defending funding for rural fire departments, state and county roads, services that protect our children in DHS custody, getting drunk drivers off the road and protecting our rural way of life.