- Associated Press - Saturday, February 22, 2014

OKLAHOMA CITY (AP) - The Oklahoma Senate wasted no time this legislative session sending some big-ticket items to the 101-member House, including a $160 million bond proposal to improve the Capitol and a bill to completely overhaul the retirement system for new public workers.

A separate plan to tap $40 million from the state’s Unclaimed Property Fund to complete a long unfinished Native American museum in Oklahoma City also is moving quickly through the Senate, along with a tax-cut bill that mirrors Gov. Mary Fallin’s call for a .25 percent reduction to the top personal rate.

But whether any of these proposals ever reach the governor’s desk is yet to be seen and hinges primarily on how they are received in the House, which is being led by newly elected Speaker Jeff Hickman, who had no idea when the session began that he would be in charge of wrangling a consensus from a 72-member-strong GOP caucus.

Hickman, R-Fairview, was elected speaker a week after the session began when former Speaker T.W. Shannon stepped down to focus on his U.S. Senate race, forcing him to hit the ground running, put his leadership team together and prepare for three-way negotiations with the Senate and governor’s office.

There seems to be broad support among House Republicans for changing the retirement system for newly hired state workers from a traditional defined-benefit pension to a 401(k)-style defined-contribution plan, but the bond issue for Capitol repairs and $40 million museum plan will undoubtedly be tough sells.

And getting the House and Senate to agree on a plan to cut taxes while the legislators already have about $188 million less to spend on state programs this year will also be a major challenge.

Hickman already signaled last week that the Senate-backed plan to tap $40 million from the state’s Unclaimed Property Fund to help complete the American Indian Cultural Center and Museum along the banks of the Oklahoma River is facing heavy resistance from House Republicans.

“The initial reaction from the caucus was not overwhelming in terms of embracing that idea,” Hickman said Thursday. “I think it’s going to be difficult to explain to our correctional employees how we could find $40 million for a museum, yet we couldn’t address the crisis there or the issues we have at the (Department of Human Services) and other areas of state government.”

And while Hickman said there is broad consensus among Republicans that repairs to the Capitol are needed, they are still discussing ways to fund it. Besides the Senate-passed $160 million bond proposal, Hickman said there are discussions about whether to send the proposal to a vote of the people or tap some of the $535 million in the state’s Rainy Day Fund.

“We’re looking at all those options, and I’m trying to determine from our House members, in the short time that I’ve been in the speaker’s office, what they want to do and what they feel like the best option would be to repair this building,” Hickman said.

Although House Democrats support the $160 million bond issue to refurbish the Capitol, House Minority Leader Scott Inman said his 29 members aren’t willing to vote for it just to give political cover to some Republicans.

“It has to be a bipartisan effort,” said Inman, D-Oklahoma City. “What we don’t want to see is 50 House Republicans all vote ‘no’ and go back home and tell everybody we’re bad for passing a bond proposal, when they know full well the governor and Senate Republicans want it done.

“These Republicans have been tasked to lead this state, and we’re asking them to do it.”

Fallin, meanwhile, is continuing to call for a reduction in the state’s income tax, even after learning last week the Legislature will have even less money to appropriate on next year’s budget than initially projected. Fallin’s executive budget, which called for 5 percent cuts to most state agencies, was based on a projection of about $170 million less to spend on next year’s budget, but the Board of Equalization determined last week that shortfall will be $188 million.

Senate President Pro Tem Brian Bingman reiterated his position last week that any plan to cut the income tax will have to include offsets that make up the revenue lost to the state.

“We’ll have to be creative with ideas about how you get there,” said Bingman, R-Sapulpa. “Having a tax cut with no offsets from tax credits or anything … that makes it very difficult to do.”

A plan passed a Senate committee last week that would cut the top personal rate from 5.25 percent to 5 percent, beginning Jan. 1, with a second reduction to 4.85 percent in 2016 if certain revenue growth triggers were met. That bill would offset the lost revenue be eliminating a personal deduction for property taxes that would save the state an estimated $80 million.

Hickman said it’s too early in the session to tell what kind of agreement on a tax cut might be reached, if any.

“I don’t know what that looks like at the end of the day, or if we reach an agreement with the House, the Senate and the governor,” Hickman said. “It’s definitely complicated that discussion to have $188 million budget hole. It’s going to be a challenge, but the governor said that’s something we need to have a conversation about, and we’re having it within our own caucus.”


Sean Murphy can be reached at www.twitter.com/apseanmurphy

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