Claremore Daily Progress

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March 22, 2014

Some of Oklahoma governor's agenda still alive

Agency consolidation bill gets no hearing in House


It's been seven weeks since Gov. Mary Fallin rolled out her legislative agenda on the opening day of the 2014 Oklahoma Legislature in a state-of-the-state speech and an executive budget proposal that touched on an income tax cut, public pensions, the consolidation of some state agencies and a bond issue to repair Oklahoma's crumbling state Capitol.

Some of Fallin's election-year agenda remains alive as the legislative session nears the halfway point. Other proposals were spiked by lawmakers unwilling to go along.

A Senate-passed proposal to issue $160 million in bonds to pay for repairs to the Capitol awaits action in the House, which has passed a related resolution setting a statewide vote of the people on whether to issue $120 million in bonds to repair the nearly 100-year-old building.

The House has also passed Fallin-backed measures to replace traditional pensions for new state employees with 401k-style retirement plans and a companion measure to give many state workers their first raise in seven years.

But the governor's plan to consolidate Oklahoma's arts, history and tourism agencies into one organization didn't make the cut. And while proposals to trim the state income tax by a quarter of a percentage point have been approved in the House and Senate, both contain revenue growth triggers that would delay implementation. The triggers were not part of Fallin's proposal.

Fallin said she is confident that her top legislative priorities will still reach her desk to be signed into law after the Legislature adjourns in May.

"I am very happy with the progress," Fallin said. "We have been able to keep things alive and move through the legislative process."

The first-term Republican governor, who is seeking re-election this fall, said a top priority for lawmakers is her proposal to reduce Oklahoma's top income tax rate from 5.25 percent to 5 percent. The Oklahoma Tax Commission estimates the tax cut would trim $147 million in revenue annually.

Last year, lawmakers agreed to the cut, beginning in 2015, but the plan was invalidated by the Oklahoma Supreme Court because it included more than one subject in violation of the state Constitution.

"We would like to see them keep their promise," Fallin said. "I still think it's important that we have a responsible tax cut this year."

The House has passed a bill that includes triggers for cuts to the individual and corporate income tax that requires revenue collections to offset the lost revenue to the state. The cuts would take effect no earlier than Jan. 1, 2016.

The Senate has passed a separate bill to cut the income tax rate to 5 percent once overall collections to the state's General Revenue Fund, the main operating fund for state government, return to 2013 levels.

The author of the House measure, Rep. Earl Sears, R-Bartlesville, said past unsuccessful efforts at enacting larger tax cuts more quickly have made lawmakers wary of cutting taxes "too fast and furious."

"Quite frankly I support that slow approach," Sears said. "I think it needs to be a very methodical, thought out approach."

Fallin said she would like to see the income tax reduced this year, but will accept a proposal to trim taxes in future years.

"My main objective is to help lower income taxes in our state gradually," she said.

A bond issue proposal to repair the state Capitol is a high priority for Fallin's administration, but some conservative members of the House have resisted bond issue proposals in the past.

"I think the House and the Senate should step up and pass a bond issue," the governor said. "It's very important that we fix the Capitol, the seat of our state government."

Examinations of the building, one of the state's most visited tourist attractions that was completed in 1917, have found crumbling exterior mortar as well as antiquated piping and electrical wiring that are original to the building. There is also extensive cracking of the terrazzo floor in the building's lower level.

"It's an embarrassment for our state to have repairs that need to be done and be visible for visitors to our Capitol," Fallin said.

Fallin's plan to create a new Department of Tourism, History and Cultural Affairs consisting of the Oklahoma Historical Society, the Oklahoma Arts Council, the Oklahoma Tourism and Recreation Department and other agencies failed to get a hearing in the Oklahoma House in spite of projections in the governor's executive budget that it would trim administrative costs by 15 percent.

The bill's author, Rep. Jason Murphey, R-Guthrie, said the proposal bumped up against bureaucratic opposition at the agencies.

"Each agency, no matter what the subject matter, has a certain amount of overhead," Murphey said. "As with all ideas, it often takes time to examine them."

Murphey said similar administrative structures exist in the states of Nevada and Maryland. He said Fallin's proposal will likely be the subject of a study after the Legislature adjourns in May.

Fallin said cutting the cost of operating state government is a high priority when the state is facing a budget shortfall of about $170 million.

"My role as governor is to propose ideas," she said. "I do think it's smart public policy to look for cost savings. I hope we can continue this discussion."


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