Fallin vetoes ‘Plan B’ budget, Schulz says action throws state finances ‘further into chaos’

OKLAHOMA CITY – Governor Mary Fallin on Friday evening (November 17) vetoed most of the revised budget bill approved by legislators in special session. She signed parts of the bill, deemed “Plan B” (http://www.www.capitolbeatok.com/reports/oklahoma-senate-to-vote-on-plan-b-budget), allowing funding for some health and human services.
She is calling on lawmakers to return in another special session to approve long-term funding solutions. 
Senate President Pro Temp Mike Schulz, R-Altus, expressed deepconcern after the chief executive’s veto, saying it would cause further “chaos” in budgeting. 

Lawmakers did not act on some requests the governor made in her call for a special session, such as addressing what a press release from her office characterized as “a long-term solution to continuing budget shortfalls; 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 K-12 public school teachers.”
The governor vetoed all but five of the 170 sections contained in House Bill 1019X, which was passed the state Senate earlier on Friday and was approved earlier this week by the state House.
“House Bill 1019X does not provide a long-term solution to the re-occurring budget deficits, and within three months we will come back facing an estimated $600 million shortfall,” Fallin said in a statement sent to CapitolBeatOK and other news organizations.
Fallin contends her action amends the general appropriations bill approved in May by lawmakers during the regular legislative session. “This will preserve a safety net for core health and human services until legislators come back for a second special session, which I intend to call in the near future,” said Fallin.

Fallin’s action retained a $30 million emergency appropriation to the Department of Health, which will allow the agency to make its next payroll and be funded without cuts through the remainder of this fiscal year, which ends June 30. The agency is embroiled in a significant financing scandal, which includes but is not limited to evidence of fraud in use of federal funds intended to support Oklahomans living with AIDS/HIV. 
Fallin’s veto retains short-term funding for three health care agencies (Department of Mental Health and Substance Abuse Services, the Department of Human Services) that were facing cuts because $215 million earmarked in a proposed cigarette cessation fee was struck down as unconstitutional earlier this year.
“As governor, I would like nothing more than to adequately fund agencies. The constant budget crisis has put us in survival mode. I want us to thrive. We will thrive when we can adequately and consistently fund our core services. That will happen when we find sustainable and predictable revenue sources.”
Fallin said she vetoed most of HB 1019X because it came “perilously close” to using most of the state’s available one-time funds in various accounts and drawing down on available savings in the Rainy Day Fund. Signing the measure would have left the state with few available funds to deal with an estimated shortfall of more than $600 million in the next regular legislative session, which begins in February.
The governor’s action will result in doing away with $60 million in cuts to state agencies and using $60 million from revolving funds, as called for in HB 1019X. The measure also called for using more than half of the state’s $83 million in cash reserves; a smaller amount will be used as a result of the governor’s line-item veto.
“Some legislative leaders have stated that revenue measures will be taken up in February when lawmakers return in regular session,” Fallin said. “But I am very skeptical because next year is an election year and the pressure not to do anything will be greater.
“We must find sustainable, predictable recurring revenue to fund our core services and get us out of the constant crisis. Let’s finish our work for the sake of our great state and our hardworking people. I love this state and her people, and I will continue to work tirelessly with the Legislature for them.”

President Pro Temp Schulz said, in a press release, “We are surprised by the governor’s veto. The governor’s office was involved in the negotiation of the revised budget agreement, but did not indicate the agreement was insufficient and would be vetoed.
“The revised budget agreement was not the Senate’s first choice to resolve the budget crisis but it was the only option after the House showed it was not able to meet the constitutional standards of raising revenue. Bringing the Legislature back into special session at this point seems like a waste of time and taxpayer dollars.”
The Republican leader concluded, “The governor’s veto doesn’t help Oklahoma thrive, it only serves to throw our budget further into chaos.” 
NOTE: Editor Pat McGuigan contributed to this report.