Senate and House Republicans Announce Budget Plan
Speaker of the Oklahoma House, Charles McCall, R-Atoka, center, shakes hands with Senate President Pro Tempore Mike Schulz, right, R-Altus, during a news conference to announce a deal to shore up the state budget and raise pay for teachers and some state workers with a series of tax increases during a news conference in Oklahoma City, Monday, Oct. 23, 2017, but it’s unclear if there is enough support to pass the plan, in Oklahoma City, Monday, Oct. 23, 2017. Oklahoma Gov. Mary Fallin is at left. (AP Photo/Sue Ogrocki)
House and Senate Republicans announced an agreement Monday for a proposal that would adjust the 2018 fiscal budget to provide pay increases for teachers and state employees, as well as address the $215 million deficit that resulted from last session’s failed cigarette tax.
If passed by the legislature, the budget proposal would include measures to increase revenue, such as creating a $1.50 tax on cigarettes, provide a 6-cent increase for fuel taxes, revise taxes on alcoholic beverages and would also provide for a $3,000 pay increase for teachers effective Aug. 1, 2018, as well as $1,000 pay increase for state employees excluding those in higher education, legislators and constitutional officers.
“This agreement makes more recurring revenue available, helps us stop balancing our budget with one-time funds and provides a teacher pay raise, as well as a raise for our hardworking state employees, who have not had an across-the-board pay increase in 11 years,” said Oklahoma Gov. Mary Fallin. “And, most importantly, it provides sufficient revenues to meet the basic responsibilities of state government, such as education, health and public safety. We must deliver services that work for the people, and put people over politics.”
The plan would also provide recurring revenue for transportation infrastructure and restore the Earned Income Tax Credit for low-income Oklahomans, which Oklahoma House Speaker Charles McCall said will more than offset any increased consumption costs for low-income earners.
“We believe this plan gives us the best opportunity to pass the House and Senate, and provide the state with needed revenue to stabilize mental health and substance abuse programs, keep rural hospitals open and provide a pay raise that would make Oklahoma teachers the highest paid in the region for starting pay,” McCall said.
The agreement came a week after both the Oklahoma State Department of Health and the Department of Mental Health and Substance Abuse Services announced significant cuts to multiple state programs. The agencies scrambled to address the shortfall created by the Oklahoma Supreme Court ruling in August that found the legislature’s cigarette tax to be unconstitutional.
Included among the OSDH cuts that were announced to take place beginning Nov. 15 were funding for nine statewide child abuse prevention programs, as well as 25 community health centers across the state. Another measure announced late last month was a one-day unpaid furlough within a two-week timeframe beginning Oct. 30 for OSDH personnel with incomes over $35,000.
As for the ODMHSAS, the agency announced last Wednesday that it would be forced to shut down almost all of its outpatient services by next year without additional funding. The agency would officially run out of funding beginning Dec. 1 and would reach a $75 million deficit by March, according to ODMHSAS Director Terri White.
“Without additional appropriations for the 2018 current year budget, we have no choice but to begin talking about what the additional implementation of $75 million worth of cuts looks like,” White said.
In response to both agencies’ announcements, McCall pledged last week that the House Republicans would work to prevent the agencies from having to make such cuts so as to absorb the deficit.
While the first major breakthrough since Fallin convened the special session late last month, the Republican proposal still requires Democratic support to pass in the Oklahoma House. Tax increases such as what the proposal includes require 76 votes to pass in the House, a number barely outside of the 72 seats occupied by House Republicans.
While Democrats have been supportive of reaching a solution for the budget crisis, they have criticized any plan that does not increase taxes on the state’s oil and gas industries as being too short-sighted for addressing the state’s budget.
“[The proposal] shows the depths to which they’ll [Republicans] go to protect big oil. They’ll ask you to pay more at the pump, but won’t ask O&G to pay 1 cent more. Their package fills the immediate hole but does nothing for next year’s budget short fall of 400-500 million. Completely irresponsible,” State Rep. Emily Virgin, D-Norman, wrote on Twitter Monday.
While Fallin acknowledged that the proposal does not address all of the issues raised by both Democrats and Republicans, she said the proposal will provide a solution for the current $215 million deficit as well as address long-term solutions moving forward.
“I said it a couple of weeks ago that we could not let the perfect be the enemy of the good, this package is not perfect but it is very good. And I think it is something that all parties should support; both the House and the Senate, the Republicans and Democrats. It contains a lot of what everyone has talked about,” Fallin said.