Gov. Mary Fallin to propose major overhaul of the state's tax system

Fallin spoke to reporters during a legislative forum at the Capitol. She will deliver her state of the state address to lawmakers Monday and release her proposed budget.

With the downturn in the energy industry, the past few years have been challenging, she said.

Fallin said she hopes to end the use of one-time funding, a maneuver that has been utilized to shore up the budget.

“We can’t afford to keep doing the things we’ve been doing in this state,” she said.

Fallin said she believed it was important to identify revenue streams so the state can invest in things that are important, such as education, public safety, infrastructure and health, Fallin said.

Lawmakers will reconsider adding $1.50 to the tax on cigarettes — currently taxed at $1.03 a pack — to fund health care. They will also look at ending some tax credits and incentives, and at taxing services.

Fallin said she was disappointed that budget shortfalls and local decisions have resulted in some school districts going to a four-day week. It gives a bad impression during efforts to recruit businesses to the state, she said.

Schools could save money by sharing payroll, data processing and purchasing costs, she said.

Fallin said she also will again propose a teacher pay raise. Such a proposal has support of both the House and Senate, but determining how to pay for it will be difficult.

Fallin said she will propose a bond issue and supplemental appropriations for certain agencies. The Department of Public Safety is among those requesting a supplemental to get it through the current fiscal year.

The agency has put a 100-mile limit per shift on Oklahoma Highway Patrol troopers in an effort to save money and had considered furloughs.

Fallin said if lawmakers had acted on some of the revenue and budget proposals she made last year, the size of the shortfall this year would not be as large.

Lawmakers expect to have $868 million less to spend in crafting a fiscal year 2018 budget.

Senate Floor Leader Greg Treat, R-Oklahoma City, said any revenue-raising measures must start in the House, and noted that they require a super majority in both chambers.