Friday, May 27, 2016
OKLAHOMA CITY – The second session of the 55th Legislature concluded today. Governor Mary Fallin worked with lawmakers to deliver a fiscally responsible, balanced budget that maintains common education funding at current levels and prevents the closings of hospitals and nursing homes. Additionally, she worked with lawmakers to pass and sign into law key reforms in the areas of criminal justice government efficiency and health and human services.
“We worked hard to protect key core services – common education, health and human services, corrections and the Oklahoma Health Care Authority – while keeping our eight-year transportation infrastructure plan intact. My top priorities in my second term are strengthening education and workforce, reducing the state’s incarceration rates and improving its health outcomes. Whether it’s improving public safety, fixing our roads and bridges, boosting education or raising our health outcomes and indicators, the successes of this session to protect core services in the midst of an energy crisis will help to make Oklahoma a better place to live, work and raise a family.
“Faced with a $1.3 billion budget gap this session, I am pleased that lawmakers were able to make targeted spending cuts and free up revenues through tax reform and structural budget reforms to close the gap. Those reforms included making some money in the Cash Flow Reserve Fund available for legislative appropriation, improving revenue stability of the General Revenue Fund through passing legislation creating the Revenue Stabilization Fund and apportionment reform. We also ended the double deduction on income tax, capped a tax credit for at-risk wells and adjusted a coal credit.
“But I can’t help but feel we missed an opportunity to do more to reform our budget process and consolidate agencies. We still need to do more to address structural imbalances in the state’s budget, fix problematic tax policies and make available more recurring, stable revenue.
“I was also disheartened lawmakers did not address an important health improvement measure by failing to approve a personal consumption tax on cigarettes. Smoking is Oklahoma’s leading cause of preventable death. Lawmakers approving an additional $1.50 per pack would have been the most important thing we could have done to improve Oklahoma’s health ranking.
“Oklahoma needs to address low-performing school districts and I hope lawmakers next year will consider consolidating the administrative costs of the state’s underperforming K-8 dependent school districts by putting them into existing preK-12 school districts. It’s important to note this does not mean closing rural schools. I was also disappointed lawmakers did not pass legislation to get more money to classrooms and enhance educational outcomes in a more effective way.
“As this year’s session ends, I’m pleased that legislators approved a $125 million bond issue to complete vital repairs at the state Capitol and earlier passed historic criminal justice reform bills that will help reduce Oklahoma’s prison population without jeopardizing public safety.”- Governor Mary Fallin
2017 Fiscal Year Budget
A Fiscally Responsible Budget that Protects Core Government Services
“This budget closes a sizeable portion of a monumental budget hole and prevents the dire, unacceptable outcomes so many Oklahomans have feared may happen this session. There are still reductions in this budget, but it is certainly a workable budget even amid a major energy sector downturn that is creating difficulties all across Oklahoma.” – Governor Mary Fallin
The budget passed by the Legislature and awaiting the governor’s signature sets 2017 fiscal year appropriation levels at $6.78 billion, which is $360.7 million, or 5 percent, less than the 2016 fiscal year appropriations prior to the midyear revenue failure. It is $67.8 million, or 1 percent, less than 2016 fiscal year appropriations as adjusted by the midyear revenue failure.
By freeing up revenues through tax reform, structural budget changes and cuts elsewhere in government, current funding levels, for the State Department of Education are maintained, which includes annualizing its 2016 fiscal year supplemental appropriation of $51 million. An additional $83.8 million is appropriated to the Oklahoma Health Care Authority, which will result in negligible provider rate reductions of 3 percent or less that should not cause closures of facilities or reductions of services.
Most agency appropriation reductions from the 2016 fiscal year as adjusted by the midyear revenue failure to the 2017 fiscal year range from less than 1 percent to 10 percent, with many agencies receiving an approximately 5 percent appropriation reduction for the 2017 fiscal year.
The budget maintains existing funding at the Department of Corrections by annualizing the department’s 2016 fiscal year supplemental appropriation of $27.6 million and making no further changes. It also protects critical safety net programs by providing a $16.3 million, or 2.6 percent, appropriation increase to the Department of Human Services (DHS) that fully funds the Pinnacle Plan and helps maintain other important services.
The Department of Mental Health and Substance Abuse Services receives a $6.9 million, or 2.2 percent, appropriation increase to offset some reductions caused by the midyear 2016 fiscal year revenue failure.
Senate Bill 1616: (General Appropriations bill) Makes $6.8 billion available in the 2017 fiscal year to fund core government services. (pending governor’s signature)
House Bill 3168: (State Capitol bond issue) Secures full funding for the first-ever comprehensive Capitol repair and restoration. (pending governor’s signature)
SB 694: (DHS funding bill) Ensures critical programs are maintained amid budget challenges. (pending governor’s signature)
SB 1577: (Elimination of at-risk well credits) Frees up more than $100 million by reforming a tax incentive that grew too costly. (pending governor’s signature)
SB 1606: (Elimination of personal income tax double deduction) Eliminates the ability to deduct state income taxes on state tax returns, bringing Oklahoma in line with most states.
SB 1614: (Reduction of coal credits) Reduces cost for a tax credit that benefits few companies. (pending governor’s signature)
HB 3231: (Department of Transportation bonds) Responsibly uses bond financing for road and bridge projects that have long-term lives in excess of 20 years. (pending governor’s signature)
HB 3206: (Cash Flow Reserve) Authorizes excess fund balance to be certified for appropriation.
HB 2763: (Revenue Stabilization Fund) Creates additional ways to make deposits into the Rainy Day Fund and smoothes volatile revenue sources by saving more revenues for revenue downturns. (pending governor’s signature)
2016 Policy Highlights
Criminal Justice Reform: Smart-on Crime, Evidence-Based Measures Signed into Law
“These measures will preserve public safety while helping control prison costs and reduce incarceration rates. According to all measures, Oklahoma has some of the highest incarceration rates in the country. Many of our inmates are non-violent offenders with drug abuse and alcohol problems who need treatment. This will pave the way for a wider use of drug courts and community sentencing as well as give judges and district attorneys more discretion in sentencing.” – Governor Mary Fallin
HB 2472: Gives prosecutors discretion to file non-85 percent crimes as misdemeanors instead of felonies, while considering the age, background, criminal history, character and rehabilitation needs of the offender.
HB 2479: Reduces the minimum mandatory punishment for drug offenders charged only with possession, and removes the possibility of a life sentence for the simple possession of drugs.
HB 2751: Increases the threshold for felony property crimes from $500 to $1,000. It was last increased in 2002.
HB 2753: Establishes means for broader use of drug courts and community sentencing by allowing participation, when appropriate, by those who are not yet convicted of a felony.
Other criminal justice reform measures
HB 3146: Requires all impaired driving cases to go to district court, or a municipal court of record.
SB 1214: Modifies the “not guilty by reason of insanity” defense in Oklahoma by adding a “guilty but with mental defect” and “not guilty by reason of mental illness” defense.
HB 2275: Requires DNA test for every person 18 years or older who is arrested for a felony offense. Now, such tests are required only for those convicted of a felony.
HB 2474: Allows limited driving privileges for offenders re-entering the community, increasing the likelihood of success and productivity of those individuals.
Educational Attainment and Improving Oklahoma’s Schools
“Oklahoma’s future sits in the classrooms of today. The education of our students remains my biggest priority in my budget, even in fiscal climates like this.’ – Governor Mary Fallin, 2016 State of the State Address
HB 2720: Amends the Oklahoma Charter School Act to clarify how public school districts may convert an existing public school to a “conversion school.” A conversion school has the flexibility of a charter school.
HB 2535: Creates opportunities for schools to enter into agreements with public or private organizations for the purpose of creating apprenticeships, internships, mentorships that may fill the requirement of elective courses for juniors and seniors.
SB 1269: Develops college and career endorsements for high school diplomas that direct student coursework toward clear college and career pathways.
HB 3218: Reforms the student assessment requirements by ending End of Instruction Exams and replacing them with high quality assessments that measure the Oklahoma Academic Standards, provide a comparison on how Oklahoma students correlate to their peers nationally and provide a measure of future academic success for high school students. (pending governor' signature)
HB 2957: Modifies the Teacher Leader Effectiveness Evaluation System (TLE) to create evidence-based and researched professional development plans for every Oklahoma educator.
Improving Health Outcomes
“Our overall health ranking has improved from 49th in the country at the beginning of my term, to 45th today. That’s good progress, but none of us are going to settle for a ranking of 45th. Together, we can continue to improve our health. As Oklahomans we can do better. We all know that we’re facing a tight state budget this year. But that doesn’t mean we shift our focus from our health and wellness. It helps all of us – who are able – to be physically active. It keeps us in shape, helps us deal with stress and improves our chances of being healthy. – Governor Mary Fallin
HB 2549 & SB 1149: Supports access to needed healthcare by stabilizing funds to nursing homes and integrating quality using the upper payment limit.
SB 1386: Allows the state to apply for an Innovation Waiver to make insurance more affordable and assist with healthcare system transformation.
HB 1697: Clarifies language when assisted outpatient treatment, a version of court-ordered treatment, can be used for those with mental illnesses who have been repeatedly unsuccessful in following their treatment plans.
HB 2547: Creates efficiency in healthcare by modifying telemedicine requirements.
SB 983: Creates an avenue for private sector input to the state chief information officer on health information technology investments.
“Government can always find ways to save taxpayer dollars by operating more efficiently and effectively. The reforms we continue to pursue on a state level will help to produce more flexible and responsive state agencies, eliminate government waste and save money.” – Governor Mary Fallin
SB 1570: Consolidates the Will Rogers Memorial Commission into the Oklahoma Historical Society, including funds, personnel and property.
SB 866: Paves the way for a new state medical examiner facility to be constructed and re-accreditation for the agency.
SB 1388: Consolidates the Oklahoma Scenic Rivers Commission into the Grand River Dam Authority, including facilities, vehicles and lands.