Monday afternoon Gov. Mary Fallin will deliver a State of the State address unlike any since she took office five years ago. Oil and gas prices, around which the state economy revolves, are at their lowest point since 2003, and the declining production tax revenue has left lawmakers with a $900-million-and-counting budget hole to plug.
Fallin plans to outline a specific plan to restructure the budget by examining specific revenue streams and prioritizing where state money goes. She wants to see as much revenue as possible go toward education, criminal justice, infrastructure, and health care. It’s likely nothing will be off-limits and Fallin said it would be difficult to hold any state agency harmless.
“When you look at the money that we have to allocate, which is under $7 billion, usually last year’s it’s about $6.9 billion. This year’s is going to be about $6 billion,” Fallin told Oklahoma Watch’s Brad Gibson in a phone interview. “We actually have double that amount of money with the sales tax exemptions, and the ad valorem, and the incentives, and the revolving fund, that would be double the current amount of money that we appropriate.”
During Thursday’s annual legislative forum hosted by the Associated Press, Fallin said lawmakers only get to spend about 45 cents of every tax dollar collected, eCapitol’s Shawn Ashley reports:
Fallin said her preparation of fiscal year 2017's executive budget revealed three options: • Make no changes in the budget system and cut every agency upwards of 13.5 percent to make up for the $900.9 million decline in revenue that is forecast; • Use one-time money, other "mechanisms and tricks" to balance the budget; or • Restructure the state's budget.
"We need to look at our tax credits, our tax incentives, our sales tax exemptions, and look at ways to be able to shore up our budget and our budget shortfall so that we don’t have these repeated downturns in our budget when we really do have the revenue,” Fallin told Gibson.
The governor also plans to outline a proposal to raise teacher pay. She said she appreciates ideas put forth by state Sen. David Holt, and her predecessor, former governor and current University of Oklahoma president David Boren. But she’s worried it will take even more money off-the-top, and leave even less in the general revenue fund. Fallin says her proposal will find a way to share services within the education system.
“We do have a huge number of school districts in the state of Oklahoma, around 530 in our state,” Fallin said. “And there certainly is a lot of talk about do we need that much overhead, administrative costs? Or should the money be going back to the classroom and to the teachers themselves.”
Fallin said the number of students and teachers has increased at roughly the same rate, but there’s been a 33 percent increase in non-teaching, administrative, and other staff costs.
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