Governor Lays out Budget Plan hurt by Oil and Gas Downturn and Makes No Menton of What to Do t

In a speech marked by references to the “damaged” oil and natural gas sector and calls for “rolling up our sleeves and doing the hard work,” Governor Mary Fallin on Monday said nothing about the state’s growing problems of earthquakes and wastewater injection wells.

She did not use the word “earthquake” once in the more than 12 pages of her annual State of the State address to the House and Senate. But she made it clear the state government was hurting because of the energy downturn.

But she blamed many of the economic problems on what has happened to the energy sector in the state, recalling that five years ago when she gave her first State of the State address, Oklahoma faced a number of difficult circumstances as it started climbing out of a national recession.

“Now, just as then, we’re seeing some jobs disappearing in the wake of an economic crisis that is largely out of our control. We’ve seen a 70 percent drop in oil prices in less than two years, which has a tremendous impact on our revenues,” said Gov. Fallin. “There is an excess supply of oil and natural gas in the marketplace and instability in worldwide markets doesn’t help.”

She told the Representatives and Senators they can use the budget crisis to create new opportunities to build a solid foundation for Oklahoma.

“The oil price collapse and decades-old structural problems with the budget have caused almost a billion dollar budget hole,” said the governor early in the speech. “How we respond will define our future more than anything else.”

Governor Fallin made it clear cuts must be made in the government.

“Even in this fiscal climate, we can pass a budget that begins the type of true, meaningful fiscal reform the state needs,” she told legislators. “That’s the type of reform proposed in my executive budget.”

She went on to list where she proposes cuts in state spending to include 6 percent reductions in the budgets of most state agencies, with the exception of The Department of Human Services, the Health Department, the Health Care Authority, the Mental Health and Substance Abuse Services, the Department of Public Safety, the Oklahoma School of Science and Mathematics and the Office of Juvenile Affairs. Those seven agencies will receive a 3 percent reduction in their budgets.

The Governor also pushed for a cut in the $8 billion in annual sales tax exemptions.

“We’ve asked around and nobody can remember any of these ever getting repealed, let alone reviewed,” said Fallin. She also proposed the lowering of Oklahoma’s mandatory drug possession sentences in order to reduce the state’s prison population. Her Education plan calls for a permanent $3,000 teacher pay raise and said it can be done without raising the state sales tax to the highest level in the nation. The Governor also said it’s time to consolidate the administrative costs of the state’s underperforming K-8 dependent school districts, but quickly added, “this does not mean closing rural schools.”

She also cited the need to finish repairs to the state capitol.

“Yes, we’ve faced tough challenges before, and by working together we can solve today’s problems too,” said Governor Falln as she prepared to end her speech.

But there was no mention of the earthquake crisis and what more the state could be doing to help find a solution.


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