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FOR IMMEDIATE RELEASE
February 6, 2017
Governor Mary Fallin Delivers 2017 State of the State Address
Governor
Proposes Bold Reforms to Fix State’s Budget System; Calls for Eliminating State
Sales Tax on Groceries, Corporate Income Tax and for Pay Raise for Teachers
OKLAHOMA CITY – Governor Mary Fallin
today delivered the annual State of the State Address in front of a joint
session of the Oklahoma Legislature. In it, 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
the state’s infrastructure needs. Her State of the State Address can be found
here. The proposed Executive Budget for Fiscal Year 2018 can be found here.
Modernizing
Oklahoma’s tax laws
Fallin told lawmakers she is
proposing a bold series of reforms to modernize the state’s tax laws and ensure
new growth in years to come. These reforms will also ensure Oklahoma has the flexibility to
prioritize spending as new needs emerge.
“This plan eliminates
the most regressive tax on the books today, the state sales tax on groceries.
This will benefit all Oklahomans. Eliminating the state sales tax on groceries
is expected to result in annual savings of between $350 to $676 for a family of
four.
“It also gets rid of
one of the most volatile sources of revenue - the corporate income tax. It will
reduce the paperwork and red tape burden of many small businesses in our state
and boost economic development. Eliminating this tax provides more transparency
as it also eliminates the need for the Legislature to pick winners and losers
with specific tax credits.” – Governor Mary Fallin
The governor said that when the Legislature many decades ago first contemplated
the sales tax laws to boost revenues, the economy depended on the manufacture
and sale of goods. As the economy in the United States has shifted from a
manufacturing-based economy to a services-based economy, the way we impose
taxes and collect revenue no longer reflects the current economy, but an
outdated system that has not changed much since its inception.
“By expanding the sales
tax base, this allows us to eliminate the state sales tax on groceries and the
corporate income tax. And it may be possible in the future to further lower the
sales tax rate.” – Governor Mary Fallin
Calls
on lawmakers to approve teacher pay raise
Fallin, for the second year in a
row, challenged lawmakers to approve a pay raise for public school teachers.
“A
thriving, prosperous economy must have a skilled, educated workforce. That
starts with good teachers in the classrooms providing our children a quality
education FIVE days a week. And my budget provides both.
“In
a recent meeting I hosted with major national site selection companies, an
executive asked me how he could persuade businesses to come to Oklahoma when
some of our schools have four-day education weeks. We must have five-day school
weeks.
“Let’s
act on a permanent pay raise for our public school teachers. It is what the public and families want. The
pay raise may need to be phased in and it may be targeted, but it must be
done.” – Governor Mary Fallin
But
the governor said a pay raise alone will not improve student outcomes. Administrative
inefficiencies must be addressed.
“We have a very top-heavy system
that needs to be reformed to provide teachers and students more resources. The
state already provides a number of services that schools could voluntarily take
advantage of to save money, such as IT services, purchasing and bonding
assistance.
“In
addition, I am creating a task force to review the state education funding
formula, evaluate funding sources, and analyze the K-12 system footprint. Just
as we must fix our own state budget structural issues, we must do the same with
the K-12 education system.
“Our
education system must be focused on creating the best outcomes. To do so, we
must ensure more money goes to our classrooms and teachers. We must empower
students and parents by giving them more choices so they can best address their
own needs.” – Governor Mary Fallin
Personal
consumption tax on cigarettes
Fallin again asked legislators to
raise the cigarette tax.
”To
improve the health of our state, I’m also once again asking you to raise our
cigarette tax. Smoking remains the
Number One preventable cause of death in Oklahoma. It costs our state $1.62
billion in health care costs. The revenue raised can be spent on current health
care needs.” – Governor Mary Fallin
Directing
gasoline and diesel tax revenue goes to roads and bridges
The governor said her reform plan
calls for gasoline and diesel fuel taxes to go roads and bridges
“My
plan will ensure taxes associated with roads and bridges are the funding source
for maintenance of roads and bridges - period, returning
individual income taxes to the General Revenue Fund. This plan does not impact
the projects in the Department of Transportation’s 8-year plan.
“Oklahoma currently ranks 48th
in diesel tax in the nation and 49th in gasoline tax. I am proposing
a new revenue stream by increasing our gas and diesel taxes to the regional
state average, but still below the national average.
“As we’ve discussed for decades,
let’s put the fuel taxes into roads and bridges.” – Governor Mary Fallin
Criminal
justice reforms
Fallin asked lawmakers to invest in
ways to be smarter on crime and tough on true criminals.
“It’s
no secret our prison population is in a crisis with over 61,000 people under
the jurisdiction of corrections. Our prisons are way over capacity, and our
prison population is expected to grow by 25 percent in the next 10 years.
“Oklahoma’s
overall incarceration rate is the second-highest in the country. We lead the
nation in female incarceration – incarcerating women at two and a half times
the national average.” – Governor Mary Fallin
Without reform, Oklahoma must build or lease three
new prisons. The governor created the Oklahoma Justice Reform Task Force to
find data-driven, smart-on-crime policies to focus on improving public safety.
“Seventy-five
percent of new admissions in prison are nonviolent offenders. The number of
drug-possession offenders sentenced to prison with no prior convictions has
more than doubled the last five years. My budget includes new money for
corrections and treatment, which includes a $50 million bond issue to build
wings on a men’s and a women’s prison for substance abuse offenders and
rehabilitation.” – Governor Mary Fallin
Other
highlights
The governor, during her speech,
recognized seven Oklahoma Highway Patrol troopers who apprehended a killer last
fall in a rural area in Custer County. They were troopers Brian Costanza, Chris
Hanover, Trenton Keasler, Brandon Seward and Micah Whittington along with
helicopter pilots Capt. Brian Sturgill and Cole Patterson.
Fallin also said the state’s
crumbling infrastructure should no longer be ignored. She has identified
Oklahoma’s most urgent, pressing infrastructure needs along with a bond
proposal to address them. They include a new Department of Health lab, which is
needed for accreditation, and improving facilities for corrections, mental
health and juvenile affairs.
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