OKLAHOMA CITY — Following the Feb. 5 opening day of the legislative session, Gov. Mary Fallin unveiled her budget proposal that would include over $700 million in revenue increases.
The governor’s budget plan is essentially the same one that state business and civic leaders have been promoting under the name “Step Up Oklahoma.”
The revenue increases would come from a $1.50 tax increase on tobacco products, increasing the gross production tax on oil and gas from 2 percent to 4 percent, increasing the gasoline tax, and eliminating some tax credits and loopholes, among others. The $700 million in new revenue would include $289 million for a teacher pay raise.
Republican leaders in both the House and Senate appreciated Fallin’s emphasis on solving recurring budget shortfalls in Oklahoma, but cautioned that the proposal should not just focus on new taxes, signalling that it might be difficult for the Republican-controlled legislature to summon up the needed 75 percent majority vote to pass tax increases.
“The Senate has repeatedly passed responsible revenue measures that would help fix the structural problems in our state budget and pay for important things like a teacher pay raise. But we can’t only focus on revenue,” Senate President Pro Tempore Mike Schulz said. “We need to implement budgetary reforms and prioritize our spending to ensure the most efficient use and best return on each tax dollar collected.”
Likewise, Democrats in the House of Representatives called for some changes to the governor’s budget plan. Rep. Emily Virgin, D-Norman, is the House Democratic Caucus Chair. She said the top income tax bracket should also be increased from 5 percent to 5.25 percent.
Democrats also called for restoration of the Earned Income Tax Credit for lower-income residents of Oklahoma and to tie the state’s standard income tax deduction back to the federal deduction. The support of Democrats will be critical, since it is unlikely most conservative Republicans will vote in favor of any tax increases.
“This caucus’ test for any tax package has always been whether it brings in sufficient revenue and whether it is fair and equitable for all Oklahomans,” Virgin said. “For too long, low and middle-income Oklahomans have been asked to pay more than those at the top.”
Aside from Fallin’s call to pass a strong budget, the governor also asked lawmakers to pass “smart-on-crime” justice reform and to focus on care for the mentally ill, instead of placing them in Oklahoma’s overcrowded prison system.
Corrections Director Joe M. Allbaugh praised Fallin’s speech, while pointing to the fact that state prisons are at 113 percent capacity. Allbaugh said the state legislature needs to take action this session to ease the burden on Oklahoma’s Department of Corrections.
“The governor’s statements (Monday) on criminal justice reform should have a galvanizing effect on our state’s elected officials,” Allbaugh said. “At DOC, we deal with reality, not fantasy. And the reality is the state is failing by continuing to put people in prison with no regard for how they got there in the first place, and little support for reentry programs.”
“The governor’s dedication to sentencing reform is crucial to ease inmate population growth, reduce spending and prevent individuals from becoming felons in the first place. That helps them lead more productive lives, which makes for better neighbors for us all.
“Additionally, fewer inmates means more resources for programs to help offenders return to society. We pledge to continue working with legislative leaders and the governor as they make decisions in the best interests of our state and its future.”