Gov. Fallin: 'Cutting Down to the Bone And Leaving Is Not A Plan'

May 9, 2017

Governor Mary Fallin says time is running out for the Oklahoma legislature to pass a budget.

Fallin says while the legislature ends on May 26th, any bills to raise revenue for the state have to be passed before the end of next week.

"We need to figure out a path forward. Not addressing the structure of the budget and just going ahead and cutting down to the bone, and then leaving, is not a plan. It's not a vision for the future."

She's calling on lawmakers to come up with a plan and reopen negotiations with her office.

"It's time to have serious discussions between all the top leadership people and my office - you can't just cut me out and expect that I'm going to be okay with whatever they send me."

Fallin reiterates if she gets a budget with just more cuts she’ll veto it, and then consider her next move, which could involve a special session.

"Some members say, 'don't worry, we're going to pass a budget.' But if they pass a budget that dramatically cuts services on top of the cuts we've already had, then I'm going to veto it. And I've said, I'll stay as long as we need to. We can all cancel our June vacation plans. We need to get our job done."

She says this is going to take everyone coming to the table from both sides of the aisle, especially as any measures to raise revenue need three-quarters of each chamber to approve them.

"It has to be Democrats and Republicans working together, not just Republicans trying to get everything done. Democrats need to bring their chips to the table too and work with us."

Fallin has pushed for expansion of sales tax to service items, as well as increases in taxes for cigarettes and gas, but she says all options remain on the table.

Oklahoma faces a projected $878 million budget hole for the fiscal year that begins July 1st.

FULL TRANSCRIPT:

MICHAEL CROSS: I'm with Governor Mary Fallin. Governor, we've got less than three weeks of this legislative session. How are things going right now?

GOVERNOR MARY FALLIN: Well, we have 10 days left to look at any revenue enhancing measures to be able to invest in education, public safety, health, human services, transportation. And nothing's changed since last week. And as I lead a siren call off last week, we're in a crisis. We need to find solutions to the problem. Don't be part of the problem versus the solution here at the Capitol. Either put up a vote on the board and let's start finding ways to fund essential services or just say we're not going to do it. And we got a long ways to go.

CROSS: We've got schools right now that are -- it's almost worse than getting cuts. They don't even know what to expect for next year.

FALLIN: You know what one thinks about not getting a budget done is the uncertainty that the schools face with letting teacher contracts with, for example the road projects are being built right now. You have contractors that go out and hire people that buy supplies, buy asphalt, whatever it might be. You have Corrections that need to decide where we're going to put inmates. And 'do we have room or do we not?' You got all these different things of uncertainty in state government. And then, even the business community not knowing what's going to happen for you know the business community itself. Are we going to be able to have this skilled educated workforce, career techs, higher education, being able to teach people what they need to know, skill-wise, or not? And so we need to start making some decisions. We've had very slow budget negotiations. I know my office has not had as active role as we like to have, and it's not because we're not trying, with the leadership. It's just that they don't know where they're going yet to be able to have the discussions with me. And what concerns me is that if they're not discussing what their ideas are with me, and as I said, if we get down to the final days and they pass a budget, which some members say, 'don't worry, we're going to pass a budget.' But if they pass a budget that dramatically cuts services on top of the cuts we've already had, then I'm going to veto it. And I've said, I'll stay as long as we need to. We can all cancel our June vacation plans. We need to get our job done. But we need to figure out a path forward and just not addressing the structure of the budget and just going ahead and cutting down to the bone and then leaving is not a plan. It's not a vision for the future. I've laid out my plan. I didn't even like a lot of things I put on the table as a suggestion back in February. But that was clear back in February. We're in May now! And so it's time to have serious discussions between all the top leadership people and my office -- you can't just cut me out and expect that I'm going to be okay with whatever they send me. You know we have to have this compromise, this working together. And by the way it has to be Democrats and Republicans working together, not just Republicans trying to get everything done. Democrats need to bring their chips to the table too and work with us.

CROSS: Neva Hill, for example, always says that there's still more cuts -- maybe privatization or something else large that might be able to cut, not little tiny cuts. Is there any idea like that that might also be on the table for the lawmakers to consider?

FALLIN: Well I think there's always room to make government more efficient. But, once again it takes the House and the Senate voting for them and passing them, and sending to my desk to sign and we haven't seen a lot of that either. Now over the years, the six years I've been in office, every single year in my State of the State speech, I say here's what we need to do to make government more efficient, more effective. I've gotten probably about half of those things done, which is good. Information technology, we did some consolidation of that. I asked them last couple of years to look at our school systems, especially our failing schools, our dependent schools. And if they're failing, to be able to have some shared services and administrative costs so we can put in a person that's more better at operating a school system then maybe one that's not, if they're failing, but they won't even do that. We've asked them to look at consolidating some of our law enforcement entities, ones that makes sense, to help save money. Even looking at the different pension systems and maybe having shared services on the administrative cost side, but we haven't done that. So yeah, there are some things that we can still do and things I think we should have a discussion about. But once again, it has to get to my desk. I think the other thing we're seeing out here is we see different groups of legislators saying, 'I'm not going to vote for that if you don't do this,' and playing a lot of games back and forth. And we've got to put the politics behind us, we can't be partisan. We can't do like Washington does and just lock up as a certain group of voters in a particular caucus. We need to have everybody doing their very best to find solutions to the problems, because it affects all of Oklahomans.

CROSS: Gross production taxes are obviously a very big deal. We've now got commercials from the OIPA about 'don't add the actual tax,' but at what point do we have to ask everybody to step forward and maybe pay their fair share, maybe it's not seven percent, maybe if it's up to three or four percent.

FALLIN: Well, I have told the legislators that I'm open to look at all ideas, whatever the ideas might be, but bring them to me. Like once again I can't do anything unless they send me something. So, we need them to take action. I am worried about some of the things they say are common answers like the cigarette tax or adjusting our gasoline tax, which is 48th-49th in gasoline diesel in the nation. Those seem like some logical things to do. But then you hear, 'I'm going to hold it hostage to gross reduction, I'm going to hold it hostage to income tax or Medicaid expansion or whatever might be. You know we've got to find a way to come together and go forward. But, the big thing is too, that these problems of revenue shortfalls and certainly will not stop over the decades, over the years to come, if we don't fix the structure of our budget. We know that we have an outdated tax system that was put in place in 1933. If you think about all things are here in '33 that are not here and things that are here now that we're not there back in those years, it's a different economy, it's a different business sector. And that's why I've been trying to really tell the legislators: look we've got to find a different way of doing these things. And if we don't consider that the price of oil and the energy sector has been in a two-year downturn, and find ways to diversify how we bring in our revenue in our state, we're always going to have a shortfall. I've been warning the legislators that next year is a gubernatorial election, and all the state-wide elected officials will be up, all the House of Representatives will be up, and half the Senate. And, it's just going to be a big election year and people don't like to make change in election years. So we need to do it this year. In fact, we just need to do for the stability for our state and to get rid of the uncertainty.

CROSS: If you were to actually call back for a special session, any idea what that would look like? FALLIN: Well, it's an option that I can have a special session, I could have a concurrent session. Although if I did tell the legislators I would do that, then they may not do their job the next 10 days. And so, we're weighing those options. But I really want them to get their job done in the next 10 days.

CROSS: What is your message right now to lawmakers as they go out this next 10 days needing to raise some kind of revenue?

FALLIN: Well, I think it's... I know the job is tough. I know these are hard decisions. But these are real lives that we're affecting, whether we fund schools, whether we fund health authorities, whether we fund the transportation, corrections -- these are real. These things have real impact upon our quality of life, upon our our image. I was telling a group of legislators this morning that we had a major company in from California last week that's in the aerospace business looking at bringing a big manufacturing concern that would help us diversify our economy. But it's hard for me to recruit these businesses to our state when they read in the paper that we're we're only funding four-day school weeks and that we have other budget issues with transportation, whatever it might be. And they read that stuff, they hear that stuff about Oklahoma and think, 'well, you know, I like you guys, but I'm not real sure I want to come to your state,' so we need to get that problem solved. And I guess the big message is: don't be part of the problem, be part of the solution. Bring forth your ideas, put the votes up on the board. If the votes fail, fine -- let's go look for another solution, but we can't just not put the votes up on the board, thinking it's going to resolve itself.

CROSS: Finally, what is your message to the 3.5 million Oklahomans who also don't know necessarily what's going on inside this building?

FALLIN: Well, I think to our fellow Oklahomans is, you know, I still think we're a great state. We have a great quality of life. We have great things going on in many, many pockets across the state. We have a low unemployment rate. Exciting times in Oklahoma City and Tulsa and all the other surrounding areas. But we need to bring that certainty to our budget. We need to fund core services, like education, our infrastructure, our Health and Human Services, our public safety entities, because if we become a third world state because we don't fund those things, then it's not going to help our image to be able to recruit new businesses and create new jobs. I think we can do it, but it's just going to require some tough votes getting things done. And I think if the public would tell their legislators: look, we want you to fix these problems. Don't just cut bait and go home, because they may at this point in time. But, we really think it's important that you fix these things and we'll stand by you when you fix them. I think that would go a long ways.

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