The Norman Transcript

December 21, 2012

Fallin: Schools, prisons, safety top priorities

By Sean Murphy
The Associated Press

NORMAN — Governor has about $7B in available revenue for budget

OKLAHOMA CITY — Gov. Mary Fallin said Thursday that public education, prisons and public safety will be among her top priorities as she prepares a budget for the upcoming fiscal year based on about $7 billion in available revenue.

Fallin cited those three areas of state government after the state Board of Equalization voted to approve an early revenue estimate that showed she would have about $214 million more than last year to include in her budget.

While she was pleased that Oklahoma’s economy continues to grow, the governor also expressed caution over the uncertainty about looming cuts to federal funding that could result from negotiations over the so-called fiscal cliff.

“We don’t know what Washington is going to be doing,” Fallin said. “We don’t know what level of cuts we’ll be receiving from the federal government as far as federal funds that come to our state, so it’s been challenging preparing a budget, even though we’re fortunate to be having revenue growth in our state.”

The governor’s office uses the December revenue projections to develop the executive budget, which Fallin will present to lawmakers when the legislative session begins in February. The board will meet again in February for a final certification of the amount of revenue lawmakers will have available.

While the governor’s budget is simply a recommendation to the legislature, it is often used as a starting point for negotiations over spending priorities.

“Education is certainly one of the top areas that we’ve been talking about, being able to put funds towards the reforms we’ve been able to pass over the last couple of years,” Fallin said. “Certainly (the Department of) Corrections has some challenges with being able to keep correctional officers in the correctional facilities and prisons.”

The governor also noted that because of increases in several revenue streams dedicated exclusively to education, including a portion of individual and corporate income taxes, a state fund for public education is projected to see an increase of more than $78 million from last year.

“We’re starting out in a good position already being able to give education $78 million more in projected funds on top of the budget that they had last year,” Fallin said.

Fallin said she also plans to push once again for a cut in the state income tax rate, but she acknowledged her proposal likely will be more modest than one she endorsed last year. That plan would have immediately slashed the top rate from 5.25 percent to 3.5 percent, with further cuts triggered if certain revenue growth criteria were met.

The governor’s proposal last session would have offset much of the lost revenue by eliminating dozens of exemptions and deductions, but lawmakers balked at eliminating many of those, and the deal for a tax cut fell apart in the waning days of the session.

This year, Fallin said her proposal would be “simpler to administer,” although she said the details still hadn’t been worked out.

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