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Oklahoma GOP unveils new special session budget agreement to mixed reactions

Andrew W. Griffin / Red Dirt Report
Oklahoma Gov. Mary Fallin.
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OKLAHOMA CITY-  On Monday, Oklahoma State leaders said they had reached an agreement on adjusting the 2018 fiscal year budget to help put “Oklahoma on a more stable budget path.”

During a special press conference Monday, Governor Mary Fallin, Senate President Pro Tempore Mike Schulz and House Speaker Charles McCall said they reached an agreement to fill the $215 million budget hole and provide a teacher pay raise. Not all legislators are pleased with the deal, however.

If passed by the Legislature, the agreement would:

·   Place a $1.50 tax on a package of cigarettes.

·   Provide for a 6-cent fuel tax increase.

·   Revise taxes on alcoholic beverages.

·   Restore the Earned Income Tax credit.

·   Provide for a $3,000 teacher pay increase, effective Aug. 1, 2018.

·   Provide for a $1,000 increase for state employees, effective Aug. 1, 2018. It does not pertain to higher education, legislators or constitutional officers, such as statewide elected officials and judges.

The agreement makes no mention of a gross production tax increase, something state Democrats had pushed throughout the Legislative session and special session, however.

“This agreement is the result of countless hours of discussions and meetings,” said Fallin. “It is apparent that rapid changes in our economy have created unsustainable and unpredictable revenue collection patterns. We need to seek long-term sustainability and stability as opposed to unpredictability and volatility.”

Fallin said the agreement would make more recurring revenue available, help stop balancing the state budget with one-time funds and would provide a teacher pay raise as well as a raise for state employees who have not had an across-the-board pay increase in 11 years.

“And, most importantly, it provides sufficient revenues to meet the basic responsibilities of state government, such as education, health and public safety,” she said in a statement. “We must deliver services that work for the people, and put people over politics.”

The plan, which institutes a $1.50 per-pack cigarette tax and a 6-cent per gallon increase to the motor fuel tax, also includes changes to alcohol tax rates. The plan also includes bringing back the earned income credit. In 2016, the Oklahoma Legislature voted to make the Earned Income Tax Credit non-refundable with the justification that tax collections would increase by $29 million in 2017.

"It's time to bring an end to special session, a resolution, so we can move on," Fallin said.

House Democrats are already expressing their disappointment in the proposed agreement. On social media, Rep. Emily Virgin (D-Norman) wrote that while the package fills the immediate hole, it did nothing for next year’s “budget shortfall of $400-$500 million.”

“Completely irresponsible,” she wrote. “If compromise means giving the other side zero of the things they asked for, then yeah, great compromise.”

Rep. Forrest Bennett (D-Oklahoma City) also expressed outrage over the proposal.

“Unbelievable. After Dems spent months negotiating in good faith, GOP just walked away and announced their own terrible plan,” Bennett wrote on Twitter minutes after the press conference. “I’m learning about this plan like everyone else – from the news. I guess they’ve decided to ignore the peoples’ plea for compromise. This is a 100 percent percent tax on the working class in Oklahoma. We got here because they cut income taxes and handed out corporate welfare. They want to get out of this mess by taxing YOU more and avoiding making everyone pay their fair share. It’s offensive.”

Oklahoma Sen. Greg Treat (R-Oklahoma City) said the Republican budget proposal will need 75 percent of votes in order to pass the revenue bills, which would require Democrat support. The bills could be introduced this week.

Schulz, however, said the plan would put the state in better financial shape in the long run.

“The Legislature has a tremendous opportunity with this deal to solve our immediate budget crisis, put the state on more solid financial ground moving forward, and deliver on a much-needed and much-deserved pay raise for classroom teachers and most state employees.,” he said. “As Senate leader, I’ve stressed to senators the importance of long-term thinking and planning. This deal gives us the chance to deliver on that, and institute reforms that will have a tremendous impact on our state for years to come.” 

McCall said he believed the plan offered 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.”

“This plan also provides recurring revenue for transportation infrastructure and restores the Earned Income Tax Credit for low-income Oklahomans, which more than offsets any increased consumption costs for low-income earners,” he said.

Fallin said details of the budget deal are will being worked out, but could be introduced later this week.

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Heide Brandes

Heide Brandes is an award-winning journalist and editor with more than 18 years of experience....

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