OKLAHOMA CITY (AP) - Oklahoma Gov. Kevin Stitt, the former CEO who broadly expanded executive powers in his first term last year, asked the Legislature to extend those even further and made a case for setting aside more money into savings during his State of the State address to lawmakers on Monday.
In his speech to the Republican-controlled House and Senate, Stitt said the state’s financial picture is improving in part because of his emphasis on savings. He urged lawmakers to send a proposal to voters to increase the cap on the state’s Constitutional Reserve Fund from 15% of certified collections to 30%.
“And while we wait on this vote, I am also asking for elected leaders to join me, again, in setting aside $100 million in additional funds as part of the Fiscal Year 2021 budget,” Stitt said.
“By saving in good times, we are demonstrating our commitment to protect the taxpayer, the job creator, and the citizen who depends on core services.”
He also proposed merging several state agencies, including the Pardon & Parole Board with the Department of Corrections, the Oklahoma Turnpike Authority with the Department of Transportation, and the Office of Emergency Management with the Office of Homeland Security.
“Some will cry that consolidation is disruptive,” Stitt said. “And let me be clear - it will be for political insiders and those that find comfort in big bureaucracy.”
Stitt also released his executive budget for the upcoming year based on about $8.3 billion in available revenue, roughly the same amount as this year’s spending plan.
The governor’s proposal eliminates about $137 million in one-time expenditures from last year’s spending and projects another $14 million in savings from reduced spending on information services, health department and State Bureau of Investigation.
Among Stitt’s new spending priorities are increasing the cap on Oklahoma’s Equal Opportunity Scholarship Tax Credit from $5 million to $30 million, $5.5 million for compliance with the federal REAL ID Act, and $6 million to reduce the waiting list for Developmental Disability Services.
Democrats immediately criticized Stitt’s plan to increase spending for the scholarship tax credit, which gives tax credits for contributions toward scholarships to private schools.
“The best way to fund public schools is to fund public schools,” said House Democratic Leader Rep. Emily Virgin, a Norman Democrat. “Stop the gimmicks, governor.”
Stitt’s Secretary of Budget Mike Mazzei said the state’s improving financial condition and relatively low debt load, combined with low interest rates, could make this year an ideal one to consider some type of bond issue. Mazzei said a priority for the governor would be increasing funding for highway infrastructure, including adding shoulders and improving two-lane highways in rural areas and accelerating projects for high-volume interchanges in major cities. The construction of a new state-of-the-art prison had previously been discussed for a proposed bond issue, but Mazzei said the governor no longer believes that is a priority.
Mazzei said the governor does not support any major tax cuts or incentives this year, including restoration of the Earned Income Tax Credit for low-income Oklahomans. He said he intends to consider overhauling the tax code next year after more study
The Legislature last year agreed to give the governor the power to hire and fire the directors of the state’s five largest agencies, taking that ability away from boards of appointees, and Stitt said he planned to seek more moves like that this year
But the governor’s growing power already has led to clashes with the Legislature, even among fellow Republicans, over his influence on state agency budgets, long the purview of the Legislature.
“It’s concerning to us that these agency directors are being more beholden to the governor instead of to their consumers and the people that they serve,” said Virgin, the House minority leader.
Among Stitt’s other priorities are protecting funding for public schools, ensuring the state’s driver’s licenses are compliant with the federal Real ID Act and challenging state agencies to get rid of any regulations that could be stifling the state’s economy.
Stitt will enjoy a heavily Republican-controlled Legislature, where the GOP has a 77-23 edge in the House and a 38-9 advantage in the Senate. Each chamber is short one member due to resignations from office.
What’s not clear is how Stitt’s fight with the Native American tribes over casino gambling might affect his relationship with lawmakers. The impasse developed after last session ended, when Stitt proposed renegotiating the compacts to give the state a larger share of casino revenue. Three of the largest tribes then sued the governor in federal court seeking clarity on the issue.
Some tribal nations in Oklahoma are as powerful as any major industry, generating billions of dollars in annual revenue and doling out more than $1.1 million the last two election cycles to candidates in both parties.
Senate Democratic Leader Kay Floyd said the relationship between the state and the tribes has been irreparably harmed by Stitt’s position.
“Once it got to court, I think it got to the point where it’s going to cause long-term damage to our relationship with the tribes,” said Floyd, of Oklahoma City.
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