Bold reforms to put Oklahoma on a solid foundation for the future

By Governor Mary Fallin

Earlier this month, I introduced a plan to stabilize our state by beginning true, meaningful budget reforms and modernizing our state’s tax laws. It cuts some taxes and raises others.

To help our families, I proposed eliminating the state sales tax on groceries, which is expected to result in annual savings of $350 to $676 for a family of four. Cities and counties, though, will still have the option to keep the sales tax on groceries, thus not hurting city and county revenue.

Our corporate tax is very volatile as it is hard to estimate with losses that can be carried forward. It will reduce the paperwork and red tape burden of many small businesses and boost economic development. It also would provide more transparency as it would eliminate the need for the Legislature to pick winners and losers with specific tax credits.

Expand the Sales Tax Base

The sales tax was first enacted in 1933 in Oklahoma to boost revenues. Many of our products and services we use today were not even created in 1933. Our economy has changed considerably since then, shifting from a manufacturing-based economy to a services-based economy. The way we impose taxes and collect revenue no longer reflects the current economy, but instead an outdated system that has not changed much since its inception. If we expand our sales tax base to better reflect our economy, we could lower the overall sales tax rate or income tax.

Gasoline and Diesel Taxes Should Go to Roads and Bridges

My tax reform will ensure taxes associated with roads and bridges are the funding source for maintenance of roads and bridges.  It would not adversely affect the projects in the Department of Transportation’s 8-year plan.

Oklahoma ranks near last in gasoline (48th) and diesel taxes (49th). I am proposing a slight adjustment that would increase our gas and diesel taxes to the regional state average, but still below the national average. With our revenue shortfalls over the last several years, we have cut funding used to repair our roads and bridges.

It is important to provide sufficient revenues to meet the basic responsibilities that our government owes to its citizens, namely:

Improving Our Workforce and Educating Our Children

A thriving, prosperous economy must have a skilled, educated workforce. That starts with good teachers in the classrooms providing our children a quality education FIVE days a week.

We need to find a way to give our teachers a pay raise. We also know that a pay raise alone will not improve student outcomes. We have to ensure more existing dollars are reaching every classroom by tackling administrative inefficiencies head-on.

Ensuring the Health and Public Safety of Oklahomans

We must make public safety a priority. We can be smart on crime and tough on criminals.

Approximately 26 percent of our current Highway Patrol troopers are eligible for retirement. We must prepare for the future and fund a trooper academy. While we’re at it, no trooper should be furloughed or restricted to driving 100 miles a day because of lack of funding.

Seventy-five percent of new admissions in prison are nonviolent offenders. The number of drug-possession offenders sentenced to prison with no prior convictions has more than doubled the last five years. Oklahoma spends too much money without positive outcomes locking up low-level, nonviolent people. Doing nothing means taxpayers must spend billions of dollars more to incarcerate more people, or risk federal intervention.

There are many issues to contend with in health care, and Obamacare has created additional problems we must address.

We hope to reduce regulations to create lower-cost insurance plans, encourage investment in private health accounts so people can direct their own health care purchases and utilize successful local programs, like Insure Oklahoma, to provide health insurance that works for Oklahomans.

Preserving and Improving Our Infrastructure

We can’t continue to ignore our state’s crumbling infrastructure. In my budget, I have identified our state’s most urgent, pressing infrastructure needs along with a bond proposal to address them. They include a new Department of Health lab so we don’t lose accreditation, and improving facilities for corrections, mental health and juvenile affairs, to name a few.

By investing in our state, we are creating a stronger business climate – a place where people want to live, work and raise a family. We must put Oklahoma on a solid foundation for the future.