- Associated Press - Wednesday, April 13, 2016

OKLAHOMA CITY (AP) - Gov. Mary Fallin on Wednesday touted her proposals to close a $1.3 billion hole in next year’s budget and said she would work with the Legislature over the next six weeks to prevent deep cuts in spending on schools, highways and public safety.

Fallin said at a press conference that the proposals are among a variety of measures she and lawmakers in the House and Senate are considering to increase state revenue amid a sharp downturn in energy tax collections and assure “that we don’t have the disastrous type of cuts that we could see if we don’t get our work done here at the Capitol.”

“Businesses have had a tough go with the downturn in the energy sector. The revenues of the state have suffered,” Fallin said, noting that the state has declared two revenue failures since the beginning of the year that have forced state agencies to trim millions of dollars from their current budgets.

Projected budget cuts next year have forced some public school districts to consider laying off teachers and administrative staff. And the state’s Medicaid provider has proposed reducing provider rates by 25 percent, a plan that providers have said would force hospitals, nursing homes and clinics to close.

“We have to be careful that we don’t cut so far to the bone that we’re not effective in delivering state services,” the two-term Republican governor said. “One of the things I don’t want to do is see Oklahoma move backwards on some of the progress that we’ve already made.”

Fallin described her proposals as “a working draft” to develop a balanced budget for the fiscal year that begins July 1. Fallin said she has discussed her ideas with members of the House and Senate, which she said are developing ideas of their own. The Legislature is constitutionally required to adjourn by May 27.

The governor’s proposals include eliminating some existing sales tax exemptions, deductions and credits, issuing about $500 million in bonds to pay for scheduled road and bridge improvements, capping some revenue dedicated to various projects and tapping into some one-time revenue sources.

Sales tax exemptions the governor proposes to eliminate would raise an estimated $112 million and include sales to commercial airlines and railroads, advertising, tickets to NBA games and the sale of horses.

“I challenge the Legislature and ask them to work with me to roll up their sleeves, do the hard work, get into the details of the state budget, the needs of state agencies,” Fallin said. “I think we do have a path forward.”

If the governor’s proposals are enacted, officials say the state would have about $7 billion to appropriate next year, slightly less than the current state budget before mid-year revenue failures forced budget cuts.

House Speaker Jeff Hickman, R-Fairview, said members of his majority Republican House caucus are concerned about some of the governor’s ideas, including her plan to use bonds to pay for transportation projects.

“I think our members would look at that if there were a way to pay for it in the future,” Hickman said.

Hickman also questioned whether adopting the governor’s ideas would raise sufficient revenue to avoid deeper cuts to state agencies.

“It’s probably somewhat optimistic,” he said.

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