Oklahoma GOP leaders balk at governor's $500M bond plan

OKLAHOMA CITY (AP) — Gov. Mary Fallin's plan to shield Oklahoma public schools and other state services from budget cuts in part by issuing up to $500 million in bonds for road construction received a frosty reception in the House and Senate.

With just six weeks remaining in the legislative session, Fallin unveiled a revised budget plan for lawmakers to consider that would fill nearly all of a $1.3 billion hole in next year's budget through a combination of bonding, tax code adjustments and changes to the budgeting process.

House and Senate leaders say that while there is support for some of the governor's proposals, rank-and-file Republicans in both chambers oppose her plan to free up revenue by issuing $500 million in bonds to pay for road and bridge projects.

"That's something that we've been trying to avoid in the Senate," said Senate President Pro Tem Brian Bingman, R-Sapulpa. "We understand the good use of bonds, but let's be careful and don't overextend ourselves and create a bigger hole."

Oklahoma currently has about $2 billion in taxpayer-backed bond debt, and a bill to authorize another $125 million to complete repairs to the state Capitol is pending in the Senate. But Fallin noted about 40 percent of Oklahoma's bond debt will be paid off over the next five years and that Oklahoma's economy will eventually recover.

The governor said she understands there will be some resistance to her proposals, but said she wanted to put forth a group of ideas for lawmakers to consider in their budget talks.

"I have given them a list of ideas. Some of them they'll like. Some of them they won't like," Fallin said. "We're trying to find a path forward."

Fallin's latest proposal further exasperated House and Senate Democrats, who have fiercely opposed a .25 percent reduction in the income tax rate Fallin endorsed that took effect Jan. 1 and is projected to cost the state about $135 million next year. House Democratic Leader Rep. Scott Inman, whose 30 members could be needed to pass critical components of the budget, has said his members won't support any spending plan that doesn't include rolling back the income tax cut.

"What this looks like is the budget of a term-limited governor," said Inman, D-Oklahoma City. "When you look at what her budget has to offer, it's a lot of pie-in-the-sky stuff and a lot of false promises to people who are hurting."

Among Fallin's tax proposals are to eliminate about $112 million in sales tax exemptions for things like sales of horses, products to airlines, advertising and tickets to professional sporting events.

Lawmakers too are eying various tax incentives and deductions as a way to free up revenue to plug the budget hole. Key budget negotiators in the House and Senate said last week they reached consensus on eliminating or capping nearly $200 million worth of tax credits, including those for child care, wind power, new job creation, the purchase of coal, and a tax rebate for unprofitable wells.

The challenge for House and Senate leaders is to find consensus within each Republican caucus, where many conservative members oppose most ideas for generating new revenue.

"That's the tough part about my job that the governor doesn't have to worry about," House Speaker Jeff Hickman said after Fallin released her proposal. "I have to get 51 votes, I have to have consensus within our caucus.

"That's why the House has to go about this a little differently than just being able to have a news conference and throwing out a plan."

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By SEAN MURPHY. Copyright 2016 The Associated Press. All rights reserved.
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The Gayly- 4/16/2016 @ 11:43 AM CDT