OFFICE OF GOVERNOR MARY FALLIN
MEDIA CONTACTS:
Michael McNutt, Communications Director
Michael.McNutt@gov.ok.gov
(405) 522-8878
Web: www.governor.ok.gov
Facebook: www.facebook.com/GovernorMaryFallin
Twitter: www.twitter.com/GovMaryFallin
Jay Marks, Deputy Communications Director
Jay.Marks@gov.ok.gov
(405) 522-8858
FOR IMMEDIATE RELEASE
July 27, 2016
Governor Mary Fallin Delivers 2016 State of the State
Address
Governor Proposes Teacher Pay Increase, Consolidating Administrative
Functions of Underperforming Dependent Schools and Lowering
Oklahoma’s Mandatory Drug Possession Sentences, and Challenges
Lawmakers to Fix Structural Problems in Budget
OKLAHOMA CITY – Governor Mary Fallin today delivered the annual State of the State
Address in front of a joint session of the Oklahoma Legislature. In it, Fallin focused on the
urgent need to improve the state’s budgeting process to ensure that legislators can adequately
fund priority goals related to education, public safety, health and more. A copy of her State of the
State Address is attached to this email. The proposed Executive Budget for Fiscal Year 2017 can
be found here: https://www.ok.gov/OSF/documents/bud17_tagged.pdf
Education Is Biggest Priority
Fallin told lawmakers that education of Oklahoma’s students remains her biggest priority, with
her budget calling for a pay raise for the state’s public school teachers.
“Oklahoma’s future sits in the classrooms of today. The education of our students
remains my biggest priority in my budget, even in fiscal climates like this. … I support and I
know my fellow Oklahomans overwhelmingly support giving our teachers a pay raise. This
budget appropriates $178 million in new money for a permanent $3,000 teacher pay raise for
every teacher in this state. And we can do it without raising the state sales tax rate to the highest
level in the nation.” -– Governor Mary Fallin
The governor said it’s time to have an honest discussion about the decades-old structural
problems of the state’s education system and how to deliver to children the quality education
they deserve.
“It’s time to consolidate the administrative costs of the state’s underperforming K-8
dependent school districts by putting them into existing Pre-K-12 school districts. This would get
more money to classrooms and enhance educational outcomes in a more effective way. We must
ensure that our students are provided the highest quality instruction through advanced
curriculum and facilities.” – Governor Mary Fallin
Lowering Mandatory Drug Possession Sentences, More Money for State Prisons
For the Department of Corrections, the governor’s budget includes a $20 million supplemental
appropriation this year, which will be annualized, and a $10 million appropriation increase next
year to address continued offender growth and help keep the public safe.
Fallin, noting that Oklahoma is still No. 1 in female incarceration and consistently in the top five
in male incarceration, called for serious sentencing changes that will preserve public safety and
reduce incarceration rates.
“Oklahoma’s drug possession sentences haven’t deterred substance abuse and have filled
our prisons to over capacity. These sentences, while well intentioned, tend to send nonviolent
offenders into prison for years and years, where they live alongside violent offenders whose bad
influences can make nonviolent offenders worse. This session, I’m calling for lowering
Oklahoma’s mandatory drug possession sentences.
o First, let’s allow district attorneys to have the discretion to file any first drug offense as a
misdemeanor.
o Next, we lower the mandatory sentence from two to 10 years in prison, to zero to five
years in prison.
o For second felony offenses for drug possession, lower the mandatory sentence from two
years to life, to zero to 10 years.
o And for third felony offenses for drug possession, lower the mandatory sentence from six
years to life with no probation to zero to 15 years.” – Governor Mary Fallin
Fixing Oklahoma’s Unsustainable Budget Trends
Fallin, for the second year in a row, used graphs to emphasize the shrinking levels of dollars that
legislators are actually able to appropriate (see attached GRAPH 1). This year, legislators will
only appropriate about 44 percent of total Oklahoma tax receipts, down from 55 percent in 2007.
The collapse of oil prices and decades-old structural budget problems with the budget itself have
caused almost a $1 billion budget hole. She also asked lawmakers to approve a measure that
would reconcile agency revolving funds that contain about $1.5 billion that are controlled by
agency directors. These funds are there every year (see attached GRAPH 2). The governor
requested legislators approve her executive budget, which begins the type of true, meaningful
fiscal reform the state needs.
“This budget takes control of the challenges we face today and puts us on far better
footing for the future. It makes necessary cuts that will require continued efficiencies from
agencies, prioritizes spending and lessens those reductions in our core service areas wherever
possible. It modernizes our tax code to make it more consistent with 21st century commerce.
Because this budget proposes using recurring revenue, it uses zero one-time revenue. …There is
no one-time money in this budget. It doesn’t even use the Rainy Day Fund.” – Governor Mary
Fallin
The governor said the state could bring in an additional $200 million a year by modernizing the
way sales tax is collected. Annual sales tax exemptions total $8 billion, which is more than is
available for lawmakers to appropriate each session (see attached GRAPH 3).
“The sales tax code in Oklahoma today isn’t much different than it was in the 1980s despite
huge changes in the way commerce is conducted and the way consumers purchase goods and
services. Reading our sales tax code is like watching a VHS tape when you can use Netflix.
Modernizing the sales tax code means keeping the same low rates and applying them in ways
that better reflect today’s commerce and consumer behaviors.” – Governor Mary Fallin
Fallin told lawmakers if lawmakers take no action and don’t change the way the state apportions
and collects revenues that most state agencies would face a 13.5 percent cut for the upcoming
2017 fiscal year. If lawmakers drained the state’s savings account, the Rainy Day Fund, agencies
would see a 10 percent cut.
Personal Consumption Tax on Cigarettes
Fallin said her budget calls for capturing $910 million of recurring revenues for appropriations
that will help fund core services next year and in the years ahead. That includes $181.6 million
from increasing the personal consumption tax on cigarettes.
“Smoking is Oklahoma’s leading cause of preventable death and it costs our state $1.6
billion in related health costs each year. Our smoking rate has dropped 19 percent since I took
office, but one in five Oklahomans still smokes. This is the most important thing we can do to
improve Oklahoma’s health ranking.” – Governor Mary Fallin
Finish Repairing, Renovating the State Capitol
Fallin thanked lawmakers for approving legislation two years ago that authorized a $120 million
bond issue to begin restoring the state Capitol. The issue was a start, not a finish, the governor
said, and contractors estimate it will take another $120 million to complete the work.
“Let’s finish the Capitol’s most pressing needs. In 2017 we will celebrate with a party
this building’s 100th birthday. No one should want to stop construction. Interest rates remain
low, and the new bond wouldn’t be issued until 2018, when 40 percent of our existing bond
principal rolls off the books, so we can do this in a way that doesn’t affect next year’s budget.
This is a legacy opportunity for you all. Let’s finish the job right.” – Governor Mary Fallin
Other Highlights
The governor, during her speech, recognized faculty and students of Gore Elementary School
who improved the C score it received in the 2013 A-to-F grading system and improved it to an
A+ rating, and of Gore Upper Elementary, which also improved its scores, going from a D- in
2013 to a C+ in 2015.
Fallin noted the deaths of two Oklahoma public servants - state Labor Commissioner Mark
Costello and state Rep. David Dank - since she presented her State of the State address last year.
She also acknowledged that for the first time she has been governor, no Oklahoma National
Guard units are deployed overseas, saying that since 9/11 the Oklahoma National Guard has
answered the call over and over again to protect our homeland and defend liberty.
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