- Associated Press - Saturday, January 30, 2016

OKLAHOMA CITY (AP) - The 2016 legislative session that begins Monday will prove challenging for Oklahoma lawmakers grappling with a roughly 13 percent hole in next year’s budget that is likely to grow even larger.

Gov. Mary Fallin and Republican legislative leaders have said they intend to target “off-the-top” funding streams earmarked for things like transportation and public schools as part of an attempt to fill the roughly $1 billion budget hole. They also plan on targeting some of the billions of dollars in tax credits and exemptions the state offers.

Fallin will lay out her proposal to balance next year’s budget and deliver her annual State of the State speech to lawmakers on Monday at the Capitol, and while she acknowledged difficult times ahead, she said those challenges also present opportunities.

“I think the energy-sector crisis will actually create an opportunity for us to make things even better, more efficient, to prioritize our spending, to be able to fix our structural deficiencies within our state budget, and put our state on more sound footing,” the second-term governor told reporters last week during The Associated Press’ annual Legislative Forum.

Fallin also said she will unveil a plan to offer pay raises for Oklahoma teachers without increasing the state’s sales tax, although she didn’t release specifics.

The governor also wants changes to the state’s criminal justice system designed to curb prison growth and support a second bond issue to repair the nearly 100-year-old state Capitol.

While Democrats seem poised to work with Republican majorities in the House and Senate on criminal justice reform and scaling back tax credits, many don’t share Fallin’s optimism. House Democratic leader Rep. Scott Inman said he believes next year’s state budget will be the most devastating for core state services in more than a generation.

“I believe this year at the end of session, by May of 2016, the people of Oklahoma will be saddled with the worst budget for things that we care about the most, like children, education, health care, senior citizens and veterans,” said Inman, D-Oklahoma City.

Inman also hammered Fallin and GOP leaders for supporting an income tax reduction from 5.25 percent to 5 percent that went into effect Jan. 1 and is expected to cost the state about $147 million annually.

“They believed that cutting income taxes this January somehow superseded and was more important than funding public education, our roads and bridges and our health care system,” Inman said.

But House Speaker Jeff Hickman said Oklahoma’s economy continued to grow and strengthen over the last decade, even as the state’s income tax rate dropped from 7 percent in a series of reductions first implemented by former Gov. Brad Henry, a Democrat.

“The tax rate actually has been brought down by almost 2 percent on Oklahomans, so they’re keeping more of their money, and we’ve increased the state budget by over $2 billion,” said Hickman, R-Fairview.

Hickman also acknowledged how off-the-top revenue earmarked for things like road and bridge construction and state pension programs has limited the Legislature’s ability to properly fund state government, but he said those dedicated funds were desperately needed.

“There are a lot of long-term things that have required more funds than they should have to address mismanagement,” Hickman said. “The good news is we’re moving in the right direction.”

The House and Senate will convene at noon on Monday, and Fallin is expected to deliver her State of the State address to a joint session around 12:45 p.m. in the House chamber.


Follow Sean Murphy at www.twitter.com/apseanmurphy

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