Republican leaders in the Oklahoma Senate praised a historic, bipartisan budget agreement. The Senate is tied at 24 Republicans and 24 Democrats this year, giving Senate Republicans an equal say in developing the budget for the first time in history.
The agreement was announced Monday by Senate Co-President Pro Tempore Glenn Coffee (R-Oklahoma City), Senate President Pro Tempore Mike Morgan (D-Stillwater), and Speaker of the House Lance Cargill (R-Harrah).
Coffee said the agreement proves that bipartisanship can work at the Oklahoma Legislature.
“In recent years we have seen double-digit spending increases and a special session on the budget. In contrast, this year we have a historic, early agreement on a bipartisan budget that meets the ‘Fund Education First’ deadline, fully funds state government, provides tax relief to Oklahoma families and small businesses, and shrinks overall spending compared to last year,” stated Coffee.
“Reaching a budget agreement in mid-March gives the Legislature a realistic chance to finish the people’s business a little early this year – a move that could potentially save the taxpayers hundreds of thousands of dollars,” Coffee said.
Senate Appropriations Committee Co-Chairman Mike Johnson, R-Kingfisher, said Senate Republicans succeeded in their efforts to prioritize needs, hold the line on overall spending, and produce a fiscally responsible budget.
“Senate Republicans grew frustrated watching spending grow by double digits year-after-year. Now that Republicans have equal numbers in the Senate, we’re proud to have helped craft a fiscally responsible budget that meets critical state needs while reducing overall spending,” stated Johnson. “Sen. Crutchfield, Rep. Benge, and I put aside our political differences and worked together to develop a common sense budget framework.”
Senate Finance Committee Co-Chairman Mike Mazzei, R-Tulsa, said the tax relief provisions are critical to helping grow Oklahoma’s economy.
“Reducing our income tax rate is the number one economic development tool we have in the shed. Our agreement to accelerate existing income tax cuts will help make Oklahoma more competitive sooner. We have included a back-to-school sales tax holiday to help parents make their dollars stretch farther. Exempting many small businesses from the franchise tax makes them more competitive in the marketplace,” Mazzei said.
Major details of the agreement include:
A tax relief package that includes a back-to-school sales tax holiday, an acceleration of existing income tax cuts by a year, the elimination of the franchise tax for small businesses owing $250 or less (about 24,000 businesses), and a childcare tax credit for stay-at-home parents.
A $6.8 billion budget for FY 2008 that shrinks government by 3 percent. This budget is about $238 million less than the total amount spending in the current fiscal year, and represents the earliest budget agreement since 1972.
A $92 million supplemental funding package for FY 2007.
- Public schools will receive $60.3 million of this amount: $20.5 million for flex benefits; $21 million for fixed payroll costs associated with the $3,000 teacher pay raise; and $18.8 in reimbursements for ad valorem exemptions for businesses.
- The Department of Corrections will receive nearly $10 million in supplemental funding. The Legislature will continue to monitor the DoC budget to determine if additional supplemental funding is necessary.
- The Regents for Higher Education will receive $5.5 million in supplemental funding for OHLAP to help cover the overestimation of lottery revenues.
Full funding for OHLAP. In addition to receiving $5.5 million in supplemental this year, the Regents for Higher Education will receive $11,000,000 to fund the growth in the OHLAP scholarship program next year.
Funding for education reforms. The agreement meets the Fund Education First deadline for the first time, and includes $5.6 for ACE Initiative remediation programs, and $2,000,000 to fund additional Academic Achievement Awards.
Increased reimbursement rates for health care providers. To help insure access to quality health, Medicaid reimbursement rates will be increased to the Medicare rate for physicians, anesthesiologists, and hospitals.
$10 million in one-time funds for the state’s Civil Emergency Management Fund.