OKLAHOMA CITY – Governor Mary Fallin announced Monday an agreement has been reached adjusting the 2018 fiscal year budget.
Fallin, Senate President Pro Tempore Mike Schulz and House Speaker Charles McCall all reached a budget agreement that helps fill the $215 million budget hole and puts Oklahoma on a more stable budget path, as well as provides a needed teacher pay raise.
If passed by the Legislature, the governor’s office said the agreement would:
- Place a $1.50 tax on a package of cigarettes.
- Provide for a 6-cent fuel tax increase.
- Revise taxes on alcoholic beverages.
- Restore the Earned Income Tax credit.
- Provide for a $3,000 teacher pay increase, effective Aug. 1, 2018.
- Provide for a $1,000 increase for state employees, effective Aug. 1, 2018. It does not pertain to higher education, legislators or constitutional officers, such as statewide elected officials and judges.
Details on the agreement are still developing.
“This agreement is the result of countless hours of discussions and meetings,” Fallin said. “I appreciate President Pro Tem Schulz and Speaker McCall working to provide a long-term solution to our state’s continuing budget shortfalls. It is apparent that rapid changes in our economy have created unsustainable and unpredictable revenue collection patterns. We need to seek long-term sustainability and stability as opposed to unpredictability and volatility. This agreement makes more recurring revenue available, helps us stop balancing our budget with one-time funds, and provides a teacher pay raise as well as a raise for our hard-working state employees, who have not had an across-the-board pay increase in eleven years. And, most importantly, it provides sufficient revenues to meet the basic responsibilities of state government, such as education, health and public safety. We must deliver services that work for the people, and put people over politics.”
Schulz said: The Legislature has a tremendous opportunity with this deal to solve our immediate budget crisis, put the state on more solid financial ground moving forward, and deliver on a much-needed and much-deserved pay raise for classroom teachers and most state employees. As Senate leader, I’ve stressed to senators the importance of long-term thinking and planning. This deal gives us the chance to deliver on that, and institute reforms that will have a tremendous impact on our state for years to come. I appreciate Governor Fallin and her staff, Speaker McCall and his team, and the members of the Senate leadership team for their hard work in bringing this deal to fruition.”
McCall said: “We believe this plan gives us the best opportunity to pass the House and Senate, and provide the state with needed revenue to stabilize mental health and substance abuse programs, keep rural hospitals open, and provide a pay raise that would make Oklahoma teachers the highest paid in the region for starting pay. This plan also provides recurring revenue for transportation infrastructure and restores the Earned Income Tax Credit for low-income Oklahomans, which more than offsets any increased consumption costs for low-income earners.”
One leading Democrat likes part of the plan but overall said it is not in the best interest of Oklahomans.
Earlier this year, the Oklahoma Supreme Court ruled a $1.50-per-pack ‘cigarette fee’ was unconstitutional after lawmakers passed the revenue raising measure in the final five days of a legislative session without a 75 percent majority vote.
The fee was expected to generate $215 million for several state agencies.
As a result, Fallin ordered lawmakers to head back to the capitol during a special session to fix the budget shortfall.
The special session began last month.