The Enid News and Eagle, Enid, OK

Local and State News

February 3, 2014

Fallin renews call for income tax cut

Gov. Mary Fallin renewed her call for a cut in the state’s income tax rate and asked legislators to approve a bond issue to help repair the state Capitol Monday during her fourth State of the State speech.

The Oklahoma Legislature convened at noon for the start of the 2014 legislative session, and statewide elected officials, members of the Oklahoma Supreme Court and leaders some of the state’s American Indian tribes gathered in the House chamber for Fallin’s annual address.

“I believe responsibly lowering the income tax is the right thing to do,” Fallin said. “It’s the people’s money; it should stay with the people.”

Fallin called for a reduction in the state’s top income tax rate from 5.25 percent to 5 percent. A similar cut, scheduled to take effect in 2015, was approved by the Legislature and signed by Fallin last year, but rejected by the Oklahoma Supreme Court because it contained more than one subject.

The tax-cut bill also directed $120 million to help pay for major repairs to the nearly 100-year-old building, but Fallin reiterated her position on Monday that a bond issue is the best way to pay for those improvements.

“Raw sewage ... is literally leaking down into our basement,” Fallin said. “We must begin repairing the people’s House now. The best and most realistic way to accomplish this is through a bond issue.”

Fallin and Senate President Pro Tem Brian Bingman both have supported the idea of a bond issue to pay for Capitol repairs, but House Speaker T.W. Shannon said the majority of his caucus opposes any additional state debt. Shannon has pushed for a pay-as-you-go approach to infrastructure improvements.

“I thought the governor laid out a good game plan for the session,” said Sen. Patrick Anderson, R-Enid.

Anderson would have liked to have heard Fallin address the Department of Corrections and the challenges facing the prison system, mainly overcrowding and staffing levels.

Corrections officers, Anderson said, at James Crabtree Correctional Center in Helena often work 12-hour shifts. In the event of bad weather, he said, sometimes employees can’t make it to work, forcing guards to work double shifts.

He said he would like to see something done before some kind of incident happens.

“I thought Gov. Fallin did a good job of giving us a way to move Oklahoma forward,” said Rep. Mike Jackson, R-Enid.

Fallin, he said, pushed heavily for pension reform and made a strong case for her tax cut plan.

He said, while she can’t talk about everything in her State of the State address, she left out Department of Human Services and how the state will deal with its most vulnerable citizens.

In terms of a bond issue to repair the Capitol, Jackson said that is something will have to look at, particularly in the House where there is a “hesitancy to increase debt.”

Rep. John Enns, R-Enid, he would have liked to have heard more from the governor concerning DOC and the Department of Public Safety. Prisons are undermanned, he said, and there are not enough Oklahoma Highway Patrol troopers out on state roads.

Fallin also did not mention Northern Oklahoma Resource Center of Enid, the facility for developmentally disabled clients that is scheduled to close next year.

“We’re still fighting to keep it open,” Enns said.

He said he has not supported bond issues, because he doesn’t like for the state to go into debt, but he would support one for Capitol repairs.

Democratic leaders in the Oklahoma House and Senate criticized Fallin’s speech as being more about election-year politics.

“This was a speech that was heavy on politics and light in policy,” said House Democratic Leader Rep. Scott Inman, D-Oklahoma City. “Because this is an election year, I think we’re going to hear more and more on politics.”

Senate Democratic Leader Sean Burrage, R-Claremore, said Fallin’s proposed 0.25 percent cut in the state income tax “is fiscally irresponsible” when the state is facing a $170 million shortfall. The income tax cut would cost about $47.5 million in the fiscal year that begins on July 1.

“It will not allow us to fund core services in government,” Burrage said.

Lawmakers are projected to have about $6.96 billion in revenue to appropriate to state agencies and programs this year, which is about $170 million less than they spent last year. Fallin prepared her executive budget based on this estimate, and her budget calls for 5 percent reductions in spending for most state agencies.

“The cuts we’ve proposed this year amount to 5 percent or less of agency budgets, and the total amount is about 1 percent of state spending,” Fallin said. “Any business worth its weight in salt can find 5 percent costs savings without crippling the services it provides.”

While most state agencies will see some level of cuts under Fallin’s proposal, she is proposing an additional $50 million in spending for K-12 public schools.

“We are on a tight budget, as we should be,” Fallin said. “But good education requires appropriate funding.”

A second estimate will be approved by a state panel later this month that will determine the final amount legislators will have to spend on next year’s budget.

Anderson said he had concerns about Fallin asking for $50 million more for education spending, raises for state employees, a bond issue to fund repairs to the Capitol building and the tax cut.

“Making that math work will be a challenge,” Anderson said.

Fallin also endorsed a plan to end the traditional defined benefit retirement plan for newly hired state workers, and moving those employees into a 401(k)-style defined contribution plan, which she described as “more portable and flexible.”

Fallin did not mention the idea of a bond issue to pay for the completion of the American Indian Cultural Center & Museum in Oklahoma City and the construction of a new popular culture museum in Tulsa, both of which have been considered by legislators during the last several sessions.

Senate President Pro Tem Brian Bingman said he believes it will be “very difficult” to pass a bond issue to pay for museum construction.

“We need to again sit down with better minds than mine and see what alternatives we have,” said Bingman, R-Oklahoma City.

The Oklahoma Legislature is constitutionally required to adjourn this year by May 30.

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