AFR Lobbyist Tommy Thomas Calls Governor Fallin's State of the State "Very Courageous" and "Controversial" As She Searches for RevenueMon, 01 Feb 2016 21:12:52 CST
Governor Mary Fallin on Monday delivered the annual State of the State Address in front of a joint session of the Oklahoma Legislature. During the speech, Fallin focused on the urgent need to improve the state’s budgeting process to ensure that legislators can adequately fund priority goals related to education, public safety, health and more.
Following the State of the State Address, Radio Oklahoma Ag Network Farm Director Ron Hays talked with lobbyist for the American Farmers and Ranchers, former State Lawmaker Tommy Thomas. Thomas called the Governor's speech "very courageous" in that she was willing to discuss several "sacred cows" with the lawmakers and to propose several revenue ideas that will likely be controversial.
The conversation between Hays and Thomas can be heard by clicking on the LISTEN BAR below.
According to News9, Fallin used graphs to emphasize the shrinking levels of dollars that legislators are actually able to appropriate. This year, legislators will only appropriate about 45 percent of total Oklahoma tax receipts, down from 55 percent in 2007.
The collapse of oil prices and decades-old structural budget problems have caused almost a $1 billion budget hole. She also asked lawmakers to approve a measure that would automate the reconciliation of some agency non-revolving funds from “one-time” funds to general revenue. These funds, which contain about $1.5 billion, are there every year (see attached GRAPH 2). The governor requested legislators approve her executive budget, which begins the type of true, meaningful fiscal reform the state needs.
“This budget takes control of the challenges we face today and puts us on far better footing for the future. It makes necessary cuts that will require continued efficiencies from agencies, prioritizes spending and lessens those reductions in our core service areas wherever possible. It modernizes our tax code to make it more consistent with 21st century commerce. Because this budget proposes using recurring revenue, it uses zero one-time revenue. …There is no one-time money in this budget. It doesn’t even use the Rainy Day Fund," Fallin said.
The governor said the state could bring in an additional $200 million a year by modernizing the way sales tax is collected. Annual sales tax exemptions total $8 billion, which is more than is available for lawmakers to appropriate each session (see attached GRAPH 3).
“The sales tax code in Oklahoma today isn’t much different than it was in the 1980s despite huge changes in the way commerce is conducted and the way consumers purchase goods and services. Reading our sales tax code is like watching a VHS tape when you can use Netflix. Modernizing the sales tax code means keeping the same low rates and applying them in ways that better reflect today’s commerce and consumer behaviors," Fallin said.
Fallin told lawmakers if lawmakers take no action and don’t change the way the state apportions and collects revenues that most state agencies would face a 13.5 percent cut for the upcoming 2017 fiscal year. If lawmakers drained the state’s savings account, the Rainy Day Fund, agencies would see a 10 percent cut.
The complete budget document that the Governor presented the lawmakers can be reviewed by clicking here.
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