Fallin defies expectations, vetoes majority of budget
Governor posts video explaining the decision
Just hours after receiving a bill that would cut $60 million from state spending and raid agency accounts to balance the budget, Gov. Mary Fallin vetoed much of the bill Friday night and called for another special session.
Fallin left additional funding intact for the three agencies affected by the loss of cigarette fee revenue, along with a $30 million emergency appropriation to the Department of Health.
Legislative leaders expected
that Fallin, who watched from the Senate visitor gallery, would sign it into law. During debate, state Sen. Jason Smalley, R-Stroud, challenged Fallin to veto the bill and call for another special session.
In her video, the governor referenced the debate and how she saw so many lawmakers upset with the bill despite their votes for it.
“I gave the lawmakers a call of action for this special session,” Fallin said in a 14-minute video she posted online after announcing her veto. “The budget that was just passed does not provide a long-term solution for recurring revenue.”
In a written statement, her office noted that lawmakers failed to act on other requests she made, such as the need for more consolidation and other efficiencies in all areas of state government, clarifying intended exemptions to the new 1.25 percent sales tax on vehicles and a pay increase for public school teachers.
She did not say when she would officially call for another special session.
Oklahoma lawmakers had high hopes when they gaveled into special session eight weeks ago, hopes that fell spectacularly short Friday as they voted to cut agency budgets by $60 million.
The process was marred by false starts, failed revenue deals and blame lobbed across the Capitol rotunda. That tension continued Friday morning as senators openly criticized the House for adjourning before the budget bill won final approval in the Senate, 29-14.
The bill cut $60 million from more than four dozen agencies. To fill the remaining shortfall, lawmakers also dipped into agency accounts that are used for large or longterm projects that cannot be paid for with just a single year’s appropriation.
A single court ruling in August triggered the need for special session when justices struck down a cigarette fee that lawmakers adopted two months earlier. The fee would have raised $215 million for four agencies: the Department of Mental Health and Substance Abuse Services, the Oklahoma Health Care Authority, the Department of Human Services and the Alcoholic Beverage Laws Enforcement Commission.
The ABLE Commission would have received $1 million for enforcement of the new fee, and the remaining revenue would have been split among the other three agencies.
For the most part, Friday’s budget vote kept those agencies intact and avoiding some of the more dreaded outcomes of such a large budget cut. The Health Care Authority said it won’t need to reduce SoonerCare provider rates. DHS will preserve the ADvantage Waiver Program. Mental health services won’t be slashed as deep as some worried. The Department of Health, racked by scandal in recent weeks, will be able to make its next payroll with a $30 million emergency appropriation.
Several agencies said there would be an impact, however.
DHS said it will temporarily reduce child welfare service contracts, but the action won’t affect current services to children because the money was set aside for
payments that are not yet obligated.
Oklahoma’s mental health agency is hoping to delay some SoonerCare provider claims until next year but a spokesman said the department is in a better place than before.
At best, House Bill 1019 was a bandage. When lawmakers return to regular session in less than two months, they will face a $678 million shortfall in next year’s budget because so much of this year’s spending is based on money that won’t be available after July 1.
“We’re basically going to be reliving the last eight weeks,” state Sen. Kay Floyd, D-Oklahoma City, said during debate. “There’s no reason to think it’s going to get any better unless we change and we do better.”
The Oklahoma Council of Public Affairs, however, said the Legislature did the right thing by not raising taxes.
“This special session was a reminder that, even with total state spending at an all-time high, government will always ask for more money,” OCPA President Jonathan Small wrote in a statement. “Using so-called ‘onetime’ funds in state government is not ideal, but it’s better than raising taxes on working Oklahomans.”