After hours of debate Friday, the Oklahoma House drew the 2016 legislative session to a close by passing a $6.8 billion budget deal to fund government operations in the 2017 fiscal year.
It was one of the more contentious legislative sessions in recent memory, with passionate debates in the final days as lawmakers accused each other of losing focus whenever anything other than the state budget situation was discussed. But for better or for worse, lawmakers accomplished quite a bit over the past four months.
Billion-Dollar Budget Cuts
With a little over 72 hours left in the legislative session, Gov. Mary Fallin and Oklahoma House and Senate leaders reached a deal on a nearly $6.8 billion budget to fund state government operations starting July 1. Lawmakers spent four months figuring out how to plug a $1.3 billion shortfall.
The budget contains targeted reductions rather than an across-the-board cut for all agencies, and most state agencies saw their budgets slashed by an average of about 5 percent. That’s compared to the mid-year adjustment after two revenue failures triggered automatic cuts.
Some of the biggest hits came to the Oklahoma Department of Transportation, which saw a 16 percent cut compared to the mid-year revision. ODOT says that won’t significantly affect any current road or bridge project. The Oklahoma Arts Council and the state’s public television station OETA saw a 10 percent reduction. Five agencies saw an 11.65 percent reduction - the Department of Tourism and Recreation, the Oklahoma Department of Environmental Quality, the Department of Labor, the Oklahoma Bureau of Narcotics and Dangerous Drugs, and the Council on Law Enforcement Education and Training (CLEET).
Higher education also took a significant hit - 16 percent compared to the original FY ‘16 budget, and 7.66 percent compared to the mid-year revision. Edmond Republican state Sen. Clark Jolley, his chamber’s top budget writer, said colleges and universities were better-equipped to handle the funding reduction due to the state’s low tuition rates compared to other institutions in the region.
The House and the Senate each saw a 19 percent reduction, but one agency - the Legislative Services Bureau - saw a 184 percent increase.
The Legislative Services Bureau is primarily responsible for research and computer support for state Representatives, Senators, and their employees. They’re getting a $9 million budget increase, The Oklahoman’s Rick Green reports:
House Rep. Earl Sears said the increase makes sense in order to ensure salaries of staff and lawmakers will continue to be funded.
"We will be in the red if we don't do something," Sears said. "We wouldn't be able to make payroll at a date in the future."
. . .
David Blatt, executive director of the Oklahoma Policy Institute, said increases in funding for the Legislative Service Bureau is wholly inappropriate in a difficult economic environment.
This is a $4 million increase for the Legislature at a time when every area of government is slashed, including life-threatening cuts in mental health and human services. It's unconscionable."
Oklahomans could buy cold strong beer and wine at grocery and convenience stores starting in 2018 under a sweeping overhaul of the state's alcohol laws approved by both the House and the Senate on the session’s penultimate day. It now hinges on voters approving a state question to loosen Oklahoma's alcohol laws, and state Rep. Glen Mulready, R-Tulsa, says Senate Bill 383 allows voters to be better informed.
“We will be voting in November, so we want to have a framework that folks will know what that picture looks like at least at a basic level, behind the curtain, if that goes through in November,” Mulready said.
Both the House and Senate approved the 285-page bill by state Sen. Stephanie Bice, R-Oklahoma City, that could codify what proponents call alcohol modernization. It will go into effect if voters repeal certain sections of the state Constitution dealing with Oklahoma's liquor laws.
"We needed to allow plenty of time for business models to transition, and all of that,” Mulready said. “And to then develop and fine-tune the details. So it will go into effect October 1, 2018. So we're two years away from that actually taking effect."
Long-Awaited Corrections Reforms
A group of four sentencing reforms moved quickly through both chambers this session after similar attempts had failed in years past. State Rep. Pam Peterson, R-Tulsa, said she felt like nationwide bipartisan support for criminal justice reforms helped push Oklahoma lawmakers to approve the measures.
“These were ideas from judges, from district attorneys, from public defenders, people that understand the criminal justice system and are definitely not soft on crime,” Peterson said during Fallin’s bill signing ceremony in April.
The four bills, mentioned in Fallin’s annual State of the State address, raise the value of property crime felonies, give district attorneys greater discretion in sentencing certain non-violent felonies, widen drug court and community sentencing availability and greatly lower the state’s mandatory minimum sentences.
The reforms extended beyond the two chambers. Fallin also signed an executive order in February calling for all state agencies to remove job application questions about prior convictions. The order does not prohibit employers from inquiring about criminal history at a later time in the hiring process, but criminal justice reform champions applauded the governor’s actions, saying it showed “Oklahoma is intent on utilizing all the talent within our workforce, and it afford[ed] tremendous hope to those in the process of rebuilding their lives.”
For the first time since 2011, both chambers of the Oklahoma Legislature will have new leaders to begin the 2017 session. Current Senate President Pro Tem Brian Bingman, R-Sapulpa, and House Speaker Jeff Hickman, R-Fairview, were both term-limited and can’t run for reelection in 2016.
During a closed-door meeting at the end of April, the 39 GOP Senators picked state Sen. Mike Schulz, R-Altus, to become the next President Pro Tem. The cotton and wheat farmer from southwest Oklahoma was first elected to the Senate in 2006, and has been the Majority Floor Leader since 2012. His opponent in the Pro Tem race, state Sen. Ralph Shortey, R-Oklahoma City, criticized Schulz’s leadership style, saying he would concentrate power among a few Senators.
Across the Capitol a week later, House Republicans selected state Rep. Charles McCall, R-Atoka, as the next speaker. He’s a relative newcomer to Northeast 23rd and Lincoln, winning his first election in 2012. That means he won’t be term-limited until 2024, and that may have worked to his advantage. GOP caucus rules prevent a speaker from serving longer than four years, and the chamber has never had a four-year speaker since Republicans took over in 2005. StateImpact’s Logan Layden says he could bring a unique perspective on water to the Capitol, although he hasn’t taken a strong position on whether the state or tribal governments should control water rights in his district.
Double-Deduction And Earned Income Tax Credit
Lawmakers passed several tax reform measures to help fill the state’s $1.3 billion hole, including eliminating the so-called “double deduction” and getting rid of the refundable portion the Earned Income Tax Credit, or EITC.
The repeal of the double deduction will save the state an estimated $87.3 million per year and mainly impact high-income earners who itemize their tax returns. The legislation gets rid of the tax deduction that “allows Oklahoma taxpayers to deduct state income tax they claim on their federal income tax return from their state return,” according to the Associated Press.
Legislators changed the EITC, which benefits low-income households, from a “refundable” credit to “non-refundable,” a move which will save the state about $29 million per year. A data analysis from Oklahoma Watch found the move will reduce the income of qualified households by $312 per year on average.