Governor vetoes budget bill with shortfall

OKLAHOMA CITY – Republican Oklahoma Gov. Mary Fallin vetoed legislation Friday that would have raided cash reserves and cut deeper into agency funding to balance the state budget, setting up a showdown with her own party in the Legislature.

“I vetoed most of the budget bill, but kept intact parts temporarily preserving key health & human services funding,” she said in a posting to her official Twitter account.

The veto came hours after the state Senate gave final approval in a 29-14 vote, thwarting Fallin’s efforts to persuade GOP House members to increase taxes to keep government running. She had warned that raiding cash reserves and cutting deeper into agency funding to balance the budget would set the state “up for failure.”

The House and Senate ended an eight-week special session Friday that convened to plug a $215 million budget hole. Fallin could call another special session to try again for a fix.

She tried unsuccessfully to convince enough members of her party in the House to take up her cause of increasing taxes, including a proposed increase in teacher pay. A veto meant a return to the vicious cycle of asking for new taxes to be approved by House members who continually have said no.

State revenue has shrunk by hundreds of millions of dollars in recent years because of less cash coming from oil and natural gas production and from the impacts of a state income tax cut, exemptions and deductions.

Fallin, who sat alone in the Senate’s balcony to watch the debate Friday, said the Legislature is ignoring larger problems with the state’s finances.

“We are setting Oklahoma up for failure that will take many years to undo the damage we have done to our state’s image,” Fallin said after the House passed the bill Wednesday.

The bill would have imposed cuts of about 2.5 percent on most agencies to make up for expected revenue lost from an unconstitutional cigarette tax the Legislature approved in May. The rest of the $215 million budget hole would have been filled by using several sources of one-time money, including savings accounts.

Even Republicans who voted for the bill, such as Senate President Pro Tem Mike Schulz, refused to call it a success.

“This certainly is not how the Senate wanted to resolve the FY’18 budget shortfall, but given the inability of the House to successfully pass revenue-raising measures it’s the best option left to avoid devastating cuts to three health care agencies,” Schulz said in a statement.

Chronic shortfalls have forced deep cuts to agencies and services for three consecutive years. About 100 of the state’s more than 500 school districts have moved to four-day weeks. Highway patrol troopers have been warned not to fill up their fuel tanks. Oklahoma also has seen an exodus of teachers leaving for higher wages in other states.

And voters have begun to respond to the Republican-dominated government, with Democrats picking up four seats in the Legislature so far this year in special elections.

But Republicans still hold a wide majority in both chambers.

Ken Hicks, head of the history and political science department at Rogers State University, said budget woes will continue so long as there’s a significant number of Republicans who “don’t feel comfortable doing anything other than cutting.”

“We’re a small, rural state that is culturally disposed to vote for Republicans,” Hicks said, “even when they’ve demonstrated that they can’t govern.”

Both the House and Senate on Friday also ended an eight-week special session that convened in September just to fix the budget. The finale came in with a resounding thud from business and education leaders throughout the state.

“Now, our state will again be forced to persevere through cuts to basic, core services that further erode our ability to produce an educated, healthy workforce and maintain infrastructure to meet business needs,” Mike Neal, president and CEO of the Tulsa Regional Chamber, said Friday in a statement.

Oklahoma State School Boards Association Executive Director Shawn Hime called the budget “bad for Oklahoma’s children.”

“Political gamesmanship, partisan sniping and even squabbling within parties dominated the special session,” Hime said. “We saw legislators – including members of the majority and minority leadership – sit out important votes. Too often, our elected leaders traded barbs in news releases and press conferences instead of channeling that energy into productive gatherings around a negotiating table.”

During the regular session in the spring, lawmakers approved a new $1.50-per-pack “fee” on cigarettes in an effort to fill the state’s latest budget hole. But the Oklahoma Supreme Court struck it down in a ruling that said it violated state constitutional requirements that prohibit revenue-raising bills from being adopted in the final five days of a legislative session and without a 75 percent-majority vote.

Legislation proposed during the special session called for increasing a broad range of taxes on tobacco, alcohol, fuel and energy production to plug the gap. But that plan failed to receive the required three-quarters majority vote in the House. The entire package would have generated an estimated $430 million in recurring revenue each year, along with about $138 million in the current fiscal year.

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