Budget Agreement Details Listed

One day after the enactment of a bipartisan tax relief package, legislative leaders and the governor on Tuesday announced the outlines of a $7.1 billion state budget agreement that speeds up tax cuts for working Oklahomans, boosts teacher pay and includes important funds for critical state services such as public safety and state prisons.

“This budget agreement is the result of hard work and bipartisan cooperation, Governor Brad Henry said, "and I thank legislative leaders of both parties for finding consensus on important issues. It hasn’t always been an easy process, but lawmakers ultimately came together to do significant things for Oklahoma, such as strengthening higher education, establishing a state bioenergy center and increasing teacher pay. This bipartisan budget addresses a number of other priorities, as well as ensuring tax relief. In all, it marks a win-win for Oklahoma."

“We said very early on that the hallmark of this legislative session would be fiscal restraint and restored accountability from government. This is the first time ever in the history of our state that a Legislature cut government spending when there was the opportunity to spend more,” said Speaker Lance Cargill, R-Harrah. “We delivered a responsible state budget that makes record investments in core services while putting in place reforms that make clear we expect in return quality performance and results. At the same time, we have achieved real tax relief for Oklahoma’s working families, the very people whose productivity has helped fuel our economic growth. Important reforms include taking a first step toward a merit-based pay system for Oklahoma teachers and motivating our OHLAP scholars to earn better grades while in college. And for the first time, we will take a major step toward fixing our state’s prison problem by conducting a top-to-bottom review of the Department of Corrections.”

“This budget agreement focuses on protecting middle class families and provides a fiscally-responsible framework for Oklahoma’s future by opening the door to educational opportunities for the next generation. It includes important funding to keep tuition increases to a minimum at our colleges and universities and establishes a permanent funding source to ensure the long-term stability of the Oklahoma’s Promise Scholarship Program,” said Senate President Pro Tempore Mike Morgan, D-Stillwater.

“This fiscally-responsible agreement builds on the bipartisan budget and tax relief plan passed by the Legislature earlier this session, and represents a common sense compromise that Oklahomans can all be proud of, especially the tax cuts for working families and the long-term fix for the Teacher Retirement System,” stated Senate Co-President Pro Tempore Glenn Coffee, R-Oklahoma City. “The Senate’s power-sharing agreement has resulted in a spirit of cooperation in the Legislature’s upper chamber, and this bipartisanship is evident in today’s agreement. The stage is now set for an orderly and on-time adjournment of the 2007 legislative session.”

“Great things happen when different sides work out different priorities,” said House Minority Leader Danny Morgan, D- Prague. “Our constituents sent us to the Capitol to adequately fund state agencies that meet the needs of all Oklahomans. This inclusive bi-partisan budget is truly a victory for this state.”

Highlights of the agreement include: A four-point tax relief package to speed reduction of the state’s top marginal income tax rate, provide a childcare credit for stay-at-home parents, offer a back-to-school sales tax holiday and eliminate the franchise tax on most small businesses; An average $1,000 per-teacher pay increase, weighted toward veteran teachers and those with advanced degrees. Funds in this area also include an incentive-based program to encourage the hiring of specially-qualified teachers; $5 million to fund per diem increases at private prisons and halfway houses to ease state prison overcrowding; $1 million to the Department of Public Safety to replace obsolete vehicles; $3 million for drug courts and the “Smart on Crime Initiative"; A permanent funding source for the Oklahoma Higher Learning Access Program (OHLAP) with new college GPA requirements for OHLAP scholarship students; A tuition-lock program that allows incoming in-state Oklahoma college and university students to opt in to a guaranteed tuition rate for four years; A $33 million increase for the State Regents for Higher Education to cover operational expenses; An increase of the authorization for endowed chairs at Oklahoma colleges and universities from the current $50 million to $100 million; A deposit of $10 million into the Oklahoma Teacher Retirement System as an initial down payment on a long-term historic reform to fund Oklahoma’s broken teacher retirement system that will pump more than $200 million into the system over the next five years; $15 million for the Oklahoma Centennial Commission, as that entity completes celebrations, plans and projects for the 2007 State Centennial; $10 million for a state Bioenergy Fund, using $4 million in existing appropriations from Oklahoma Center for Advancement of Science and Technology (OCAST).
$5 million in funds for Educare centers to match private funds from the George Kaiser Family Foundation; $16.5 million for capital projects at the University of Oklahoma, Oklahoma State University and regional universities, including the state’s Cancer Center; $2.5 million for rural fire department equipment costs and $1.4 million for firefighter training; $6.5 million for the Conservation Commission to address critical needs for flood control structures across the state – leveraging state funds for 2-to-1 matching federal dollars; $10 million for State Emergency Fund and costs from devastating ice storms earlier this year.

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Budget Battle: Benge Criticizes House Democrats

A month after the passage and veto of a bipartisan state budget, House Republican leaders expressed concern after House Democrats failed to provide specifics on state budget matters during a meeting of the General Conference Committee on Appropriations (GCCA) held Wednesday.

"I am disappointed the Democratic members of the GCCA did not offer a proposal, a wish list, or a specific idea, much less voice any clear disagreement with the current proposal," said Rep. Chris Benge (R-Tulsa), chair of the House Appropriations and Budget Committee and chair of the GCCA. "This was an opportunity to find out the areas of the bipartisan budget they disagree with and try to resolve those in order to move forward with the budget process.

"It's absurd for House Democrats to claim they haven't had enough time to come up with substantive recommendations after they've postured for weeks about the budget," Benge continued. "There have been multiple open meetings, bipartisan work in the House and Senate, and multiple opportunities for input. Today we offered Democrats yet another chance to offer substantive changes to the bipartisan budget, and the bottom line is they did not."

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Miller: Henry May Be Skirting Spirit Of Law

A House leader on Tuesday said that by failing to provide a new detailed state budget plan, the governor could be skirting the spirit of state law.

"Clearly, the Governor has not complied with the spirit of the law, which requires him to present a balanced budget within the constraints of how much money the state has," said Ken Miller (R-Edmond), chair of the House Appropriations and Budget Committee.

"Balancing the budget with nearly three-quarters of a billion dollars of debt is not good enough. The governor's budget is obsolete. He needs to stop avoiding his responsibilities, and submit a balanced budget."

Even as the governor threatens more vetoes on five individual agency budget bills passed by the Senate last week, Miller pointed out that Henry has failed to submit a balanced budget as required by state law. Title 62, sections 41.33 and 41.34, requires the governor to submit a budget that balances revenues with expenditures, and in the event that expenditures exceed revenues, to present a plan to raise revenue sufficient to cover the additional expenditures. The governor's executive budget submitted in early February does not balance with current revenue estimates. What's more, Miller said, the governor's original budget contained funding for programs that are no longer viable this legislative session - such as an expansion of early childhood education for 3-year-olds.

Weeks ago, the House and Senate passed a $6.9 billion bipartisan state budget in House Bill 1234, a measure the governor vetoed. House Democrats have said they will uphold the governor's veto, even though most of them earlier voted for the plan.

In light of the governor's veto, House and Senate leaders in both parties have called on Henry to submit a new alternative plan with details about what he would do in contrast to the bipartisan plan he killed.

"The governor's gridlock veto games are one thing, but now the governor is just disregarding his duty by refusing to submit a new budget plan," said Miller. He noted that the governor has repeatedly refused to provide specifics about his concerns with the bipartisan budget, although he said he agreed with 90 percent of the plan before he vetoed it. According to Miller, the governor's original executive budget included a billion dollars in new spending backed mostly by hundreds of millions of dollars in new bond debt. And the governor's budget included questionable items such as a 34.1 percent spending increase for the lieutenant governor's office.

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Cargill Names Morgan To Budget Committee

Speaker Lance Cargill on Monday announced appointments to the General Conference Committee on Appropriations (GCCA), which will work out the final details of the state budget for the next fiscal year. Among those named is House Minority Leader Danny Morgan, who has criticized the budget written by House Republicans and Senate Republicans and Democrats.

Cargill said the GCCA hearings are an opportunity for those who have criticized this year’s bipartisan budget effort to come up with a specific plan of their own.

“Unfortunately, so far all that the governor and House Democrats have done is throw rocks at bipartisan ideas,” said Cargill (R-Harrah). “They haven’t offered a balanced budget of their own. The GCCA meeting will be the chance for the governor and House Democrats to do more than simply criticize bipartisan ideas. They'll have the chance to offer a plan of their own."

Cargill noted that the House and Senate have already passed a $6.9 billion bipartisan state budget in House Bill 1234, a measure the governor vetoed weeks ago. House Democrats have said they will uphold the governor’s veto, even though most of them earlier voted for the plan. But in a continuing spirit of bipartisanship, Cargill said that Morgan (D-Prague) will serve as GCCA vice chair and has made recommendations on nine more members to serve on the committee. Cargill said that he has accepted all of Morgan's member recommendations.

Cargill said the House appointments to the GCCA include 15 Republican lawmakers, the Republican members of the Appropriations and Budget Committee and each of the full committee chairs in the House, as well as House Majority Floor Leader Greg Piatt (R-Ardmore) and Majority Whip Rob Johnson (R-Kingfisher).

As the GCCA completes its work, House and Senate conferees will agree on dollar allocations for each subcommittee of the general conference.

The lawmakers Cargill has appointed to the GCCA include (in alphabetical order): Dennis Adkins (R-Tulsa), John Auffet (D-Stillwell), Chris Benge (R-Tulsa), David Braddock (D-Altus), Mike Brown (D-Tahlequah), Ed Cannaday (D-Whitefield), John Carey (D-Durant), James Covey (D-Custer City), Doug Cox (R-Grove), Dale DeWitt (R-Braman), Joe Dorman (D-Rush Springs), Rex Duncan (R-Sand Springs), Shane Jett (R-Tecumseh), Rob Johnson (R-Kingfisher), Tad Jones (R-Claremore), Guy Liebmann (R-Oklahoma City), Ken Miller (R-Edmond), Danny Morgan (D-Prague) – Vice Chair, Bill Nations (D-Norman), Ron Peters (R-Tulsa), Ron Peterson (R-Broken Arrow), Greg Piatt (R-Ardmore), Ben Sherrer (D-Chouteau), Randy Terrill (R-Moore), and John Wright (R-Broken Arrow)

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Henry Stands Up Senate Democrats

Governor Brad Henry did not show for last night's fundraiser for Senate Democrats, adding to what many say is a rift between the governor and Senate Democrats under Co-President Pro Tempore Mike Morgan.

Henry's office said he attended a daughter's soccer game in Shawnee rather than the fundraiser.

Sources say Henry agreed to help headline the dinner with Morgan before the Senate Democrats joined Senate and House Republicans in adopting the budget that Henry vetoed. The invitations announcing Henry's presence were received about the time Henry, on spring vacation in Mexico, objected to the budget.

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Senate Democrats Plan Fundraiser; Will Henry Attend As Promised Given Budget Disagreement?

Originally posted 3/27/07 ~ UPDATE: Will he or won't he? No word yet from the governor about attendng the fundraiser. Spokesman Paul Sund indicates a decision isn't made yet. Developing.... Senate Democrats plan a fundraiser on April 3rd with Governor Brad Henry and Senate President Co-Pro Tempore Mike Morgan inviting supporters to join them, but there's speculation today the governor may not be there. The event, announced in invitations received this week, is at 6 p.m. in the Grand Ballroom of the Skirvin Hilton Hotel in downtown Oklahoma City.

The invitations apparently were approved before Senate Democrats joined Senate Republicans and House Republicans to prepare a budget without Henry's input. That has soured relations between Henry and Senate Democrats, with words being exchanged and Henry describing the budget process so far as being secret. Morgan said, in essence, the governor doesn't know what he's talking about.

Whether the disagreement will see Henry spurn the fundraiser isn't confirmed, but the Capitol rumor mill says it is so. A question about it to the governor's office has yet to be answered.

The fundraiser is scheduled to last an hour and a half. Suggested donation for couples is $125, for individuals $75. For more information, call (405) 424-6889.

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House, Senate Leaders Ask Henry To Provide 'Comprehensive, Detailed Alternative' Budget

Leaders in the House and Senate today sent this letter to Governor Brad Henry: "Dear Governor Henry: Thank you for your letter inviting us to discuss the Fiscal Year 2008 budget. Before such a meeting is scheduled, please provide us with a copy of your comprehensive, detailed alternative to the Legislature's bipartisan budget plan. We look forward to meeting with you once we have received your alternative proposal and compared it to the Legislature's bipartisan budget plan. The bipartisan budget in HB 1234 has been open to the public for two weeks. We presume your alternative plan will be similarly open and detailed.

"The budget adopted by the Legislature through HB 1234 is a constitutionally-mandated balanced budget based on revised revenue estimates adopted by the Board of Equalization in February. Inasmuch as your Executive Budget was prepared using revenue estimates that are no longer valid, we would like to see your alternative plan reflecting the revised revenue estimates."

The letter was signed by Senate President Co-Pro Tempore Mike Morgan, D-Stillwater, Co-Pro Tempore Glenn Coffee, R-Oklahoma City, and House Speaker Lance Cargill, R-Harrah.

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Spiropoulos: Stand Fast, Republicans

From the Oklahoma Council of Public Affairs Blog by Andrew Spiropoulos ~ The problem with the conventional wisdom is that it is generally more conventional than wise. The story everyone is telling at the Capitol these days is that the Governor and the Senate Democrats are deeply at odds; the Senators were just delighted with the now aborted budget deal while the Governor was betrayed by them. He is now lashing out by vetoing their deal. Nice story, but what if it's not true? Read the entire post here.

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Cargill Cautions Henry On Budget Veto

House Speaker Lance Cargill (R-Harrah) today issued the following statement, as the governor considers whether to sign the budget bill that passed overwhelmingly through the Legislature this week:

"This budget agreement is a sincere attempt by both chambers to put the business of the state first. Both sides had to make compromises, but in the end, we all feel we have a strong framework in place for the operation of essential government services."

The budget process is in no way complete, Cargill noted. He said allocating nearly $7 billion in funding is a huge task - but with agreements in place on the largest expenditures and most pressing needs of the state, "we now are in a good position to negotiate the remainder of the budget and also determine how agencies should use their funds. I am proud of the working relationships that House and Senate leaders have developed this year in light of the delicate power sharing situation that exits. A veto threatens the common ground that we have found and will put us all in the position where the session will be dominated by our budget differences. It is in everyone's best interests to avoid a giant confrontation over the budget, as developed last session.

"We can have a much more productive session with a broad budget agreement in place, from which we can make adjustments. We know that the Governor has not had an opportunity to examine the details of the bipartisan budget agreement. We are absolutely committed to working with the Governor once he has reviewed our proposal, and in discussing any issues or concerns. I would personally hope that he accepts this offer and approves the agreement so we can continue to move forward on the budget and not return to square one."

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Henry Says He May Use Line Item Veto

Governor Brad Henry says he may use his line item veto on the $6.9 billion appropriations bill. It's the latest in the head-knocking between Henry and Republicans in the House and Republicans and Democrats in the Senate. They agreed on the next budget while Henry was out of state on spring break vacation; he questioned their action through Treasurer Scott Meacham and the war of words has continued since. Now, it appears Henry is poised to go through the appropriations bill line-by-line, setting up a continuing confrontation. House Democrats have taken Henry's side, saying they were frozen out of the process and claiming many needed items are not included; Henry has taken a similar position.

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Legislative Leaders Announce Budget Accord

UPDATE: House Speaker Lance Cargill, reacting to statements from the governor's office, issue this news release: "We will not hold up critical education, health and public safety funding while we negotiate the governor's pet projects." Vital services first. Pet projects later. "After passage of this critical funding bill and after we have met the core obligations of government service, we can sit down to discuss further financial projects without using vital services as a negotiating tool. "Funding for schools, hospitals and public safety should not be used as leverage and held hostage by the governor to achieve funding for his pet projects."

COFFEE REACTS: Senate President Co-Pro Tempore also reacted to the statement from the governor's office: “The Legislature has a constitutional duty to appropriate money, and we have worked very hard to develop this carefully balanced, bipartisan budget agreement. When Gov. Henry returns from his Spring Break vacation, we are confident he will like what he sees in this historic agreement,” said Coffee, R-Oklahoma City.

UPDATE: Governor Brad Henry, excluded from discussions that prompted the budget agreement, said he is disappointed and because he doesn't know the details, doesn't know how he will act on it. Republican leaders in the Oklahoma Senate praised a historic, bipartisan budget agreement announced today. The Senate is tied at 24 Republicans and 24 Democrats this year, giving Senate Republicans an equal say in developing the budget for the first time in history.

The agreement was announced Monday by Senate Co-President Pro Tempore Glenn Coffee (R-Oklahoma City), Senate President Pro Tempore Mike Morgan (D-Stillwater), and Speaker of the House Lance Cargill (R-Harrah).

Coffee said the agreement proves that bipartisanship can work at the Oklahoma Legislature. "In recent years we have seen double-digit spending increases and a special session on the budget. In contrast, this year we have a historic, early agreement on a bipartisan budget that meets the 'Fund Education First' deadline, fully funds state government, provides tax relief to Oklahoma families and small businesses, and shrinks overall spending compared to last year," stated Coffee.

"Reaching a budget agreement in mid-March gives the Legislature a realistic chance to finish the people's business a little early this year - a move that could potentially save the taxpayers hundreds of thousands of dollars," Coffee added.

Senate Appropriations Committee Co-Chairman Mike Johnson, R-Kingfisher, said Senate Republicans succeeded in their efforts to prioritize needs, hold the line on overall spending, and produce a fiscally responsible budget.

"Senate Republicans grew frustrated watching spending grow by double digits year-after-year. Now that Republicans have equal numbers in the Senate, we're proud to have helped craft a fiscally responsible budget that meets critical state needs while reducing overall spending," said Johnson. "Sen. Crutchfield, Rep. Benge, and I put aside our political differences and worked together to develop a common sense budget framework."

Senate Finance Committee Co-Chairman Mike Mazzei, R-Tulsa, said the tax relief provisions are critical to helping grow Oklahoma's economy. "Reducing our income tax rate is the number one economic development tool we have in the shed. Our agreement to accelerate existing income tax cuts will help make Oklahoma more competitive sooner. We have included a back-to-school sales tax holiday to help parents make their dollars stretch farther. Exempting many small businesses from the franchise tax makes them more competitive in the marketplace," Mazzei said.

Major details of the agreement include: A tax relief package that includes a back-to-school sales tax holiday, an acceleration of existing income tax cuts by a year, the elimination of the franchise tax for small businesses owing $250 or less (about 24,000 businesses), and a childcare tax credit for stay-at-home parents; a $6.8 billion budget for FY 2008 that shrinks government by 3 percent and makes the budget about $238 million less than the total amount of spending in the current fiscal year, and represents the earliest budget agreement since 1972; a $92 million supplemental funding package for FY 2007 and public schools will receive $60.3 million of this amount with $20.5million going for flex benefits, $21 million for fixed payroll costs associated with the $3,000 teacher pay raise; and $18.8 in reimbursements for ad valorem exemptions for businesses; the Department of Corrections will receive nearly $10 million in supplemental funding and the Legislature will continue to monitor the DoC budget to determine if additional supplemental funding is necessary; the Regents for Higher Education will receive $5.5 million in supplemental funding for OHLAP to help cover the overestimation of lottery revenues; full funding for OHLAP (in addition to receiving $5.5 million in supplemental this year, the Regents for Higher Education will receive $11,000,000 to fund the growth in the OHLAP scholarship program next year); funding for education reforms (the agreement meets the Fund Education First deadline for the first time, and includes $5.6 for ACE Initiative remediation programs, and $2,000,000 to fund additional Academic Achievement Awards; increased reimbursement rates for health care providers (to help insure access to quality health, Medicaid reimbursement rates will be increased to the Medicare rate for physicians, anesthesiologists, and hospitals); and $10 million in one-time funds for the state's Civil Emergency Management Fund.

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