Fallin, McCall, Schulz tout ‘agreement,’ decline questions

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Gov. Mary Fallin and Republican lawmakers announced “an agreement between House and Senate Republicans” at a press conference this morning but declined to take questions from media, saying she was headed to The Oklahoman’s editorial board to discuss the plan.

Fallin, House Speaker Charles McCall and Senate President Pro Tempore Mike Schulz ignored questions from press, including The Oklahoman’s own Capitol reporter who noted that his editorial board surely “would not mind” if they took time to answer questions about the proposal.

As media shouted questions, about two dozen GOP members of the House and Senate slowly filed out of the governor’s Blue Room, many with their heads down.

Fallin announced a plan that, if passed, would fill funding gaps for health agencies, provide a $3,000 teacher pay raise, provide a $1,000 pay raise for state employees and restore the refundability of the earned income tax credit. A press release from the governor’s office noted that those raises would be effective Aug. 1, 2018.

Fallin said the agreement would do those things via money raised by:

• a $1.50 cigarette tax
• a $0.06 raise to the state’s gas and diesel taxes
• and “revised taxes on our alcoholic beverages”

But any tax increases will require 76 votes in the House, meaning at least four Democrats will need to vote in favor. McCall (R-Atoka) and Schulz (R-Altus) both expressed confidence in the announced package, and they said it included things Democrats should support.

“Quite simply, this plan is a good plan,” McCall said. “It boils down to this: If you support health care, if you support education, a teacher pay raise, a pay raise for state employees, restoration of the earned income tax credit for low-income people of this state, you vote yes. If you don’t think those things are important, you vote no. It just boils down to that.”

Schulz called it a “really good package.”

“This is a huge step forward in creating reoccurring revenue to fill the budget deficit that has been plaguing our state,” Schulz said.

Fallin said it has “been very difficult to find an agreement.”

“This package is not perfect, but it is very good. I think it’s something that all parties should support,” Fallin said. “We can’t let the perfect be the enemy of the good.”

Pressure about mental health

The Oklahoma Department of Mental Health and Substance Abuse Services held a press conference Oct. 18 to discuss the impact of lawmakers not reaching a timely budget agreement.

Commissioner of Mental Health Terri White said the agency would likely implement cuts beginning Dec. 1 without the $75 million lawmakers promised when passing an unconstitutional cigarette “fee” at the end of regular session.

An extraordinary session

Fallin called an “extraordinary session” to start Sept. 25 after the Oklahoma Supreme Court had ruled a tobacco “fee” was passed unconstitutionally as a revenue measure at the end of regular session in May.

Legislative leaders adjourned after two days, opting to continue budget negotiations without some of the associated costs of special session. Last week, the Capitol was closed for electrical upgrades.

Negotiations have centered around whether House Democrats can be brought on board to achieve the 76-vote supermajority required to pass new taxes. House Minority Leader Scott Inman (D-Del City) has said his caucus would come on board for an increase in the gross production tax incentive rate from 2 percent to 5 percent.

Discussions about that rate, currently effective for the first 36 months of a spudded oil or gas well, have grown contentious, with industry associations sending Fallin a stern letter opposing increases and the governor’s chief of staff replying with an austere email of his own.

Neither Fallin, McCall nor Schulz mentioned gross production taxes in their remarks Monday morning.

Democrats: ‘Any deal without gross production tax is inequitable’

Senate Democratic Minority Leader John Sparks (D-Norman) and Rep. Emily Virgin (D-Norman) spoke to media later Monday, noting the absence of GPT in the Republican package.

“What you saw this morning was a dog and pony show,” Virgin said. “Any deal without gross production tax is inequitable.

“It’s incredible the amount of power that big oil and gas has over republican leaders in this state.”

Sparks said he had just returned from the stockyards where he was selling cattle. He said he received a call from a GOP member of Senate leadership detailing the governor’s announced plan, which he expects will fail.

“We have basically the same issues at play, but most disappointing the numbers just don’t add up,” Sparks said. “I think we all know that the packages announced this morning are not going to pass. So the question is, ‘Why did we have a press conference?’ I think the idea is to pressure people.”

Sparks said he expects Republicans will “feign surprise” if the package ultimately fails as he predicts.

“This is all a media exercise this morning,” he said. “There is no big news this morning. This is all to set up false expectations on the part of the public that some big resolution has been reached.”

Sparks said he does not know in what manner the Republican plan will be presented.

“As we know, Republicans don’t let the constitution prevent them from passing bad bills,” Sparks said. “So I don’t know if they will try to log-roll it or not.”

(Update: This story was updated at 1:12 p.m. Monday, Oct. 23, to include quotes from Virgin and Sparks.)

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