By Gov. Mary Fallin With a nearly $900 million budget gap, this session was indeed one of the most challenging. Keep in mind, it comes on the heels of having to deal with a $1.3 billion budget gap last year -- the largest budget hole in state history. It hasn't been easy dealing with these ongoing significant budget challenges we face. It is definitely not an ideal budget. But we did prevent draconian cuts to critical services and kept government from shutting down. Despite challenging circumstances, we were able to fund core mission services such as education, health and human services, and public safety. Unfortunately, we missed an opportunity to reform our budget process -- to address structural imbalances in the budget, fix problematic tax policies, and access more recurring and stable revenue. These are all topics I have repeatedly warned about; topics that do not go away just because we wish they would. It's also disappointing the budget didn't include a teacher pay raise, but there were some members who refused to vote on a number of revenue ideas that would have helped pay for a teacher pay raise. It was hard to get a budget done, forcing legislative leaders to rely on passing measures that produced revenue that required only 51 percent approval instead of the 75 percent majority required for tax increases. About $500 million of one-time funds were used in this budget, which means we're going to start out the next year with a shortfall of that amount. As a result, it will be another difficult year. Plus, add in that it's an election year, and we know it will be nearly impossible to pass revenue measures. So there is much work still to do to fix these structural issues that undermine our budget year after year. It is why I have emphasized smart reforms in areas from government accountability and efficiency to criminal justice -- an ongoing top priority for me as many of my bills were held up in the Legislature this year. Criminal justice reform necessary I am disheartened we didn't get more of the criminal justice bills passed into law. A lot of people worked very hard on these recommendations. We can do better in dealing with nonviolent offenders who have mental health conditions or who are addicted to drugs or alcohol by pursuing appropriate treatment rather than felony prosecution and long-term incarceration. Oklahoma has the second-highest imprisonment rate in the country. By 2018, we will have the highest incarceration rate in the country. One of the bills that was held up this session was HB 2281. It included important sentencing changes to low-level property crimes, and would have had a particularly important impact on our female prison population. Without jeopardizing public safety with these bills, we could have implemented smart, data-driven solutions to safely and prudently fix our criminal justice system. I will continue to work with lawmakers on this important topic, which I have strongly advocated during the past three legislative sessions. Bright spots in the session On a bright note, lawmakers approved a fix for REAL ID compliance, reduced the revenue bleeding for overly general wind tax credits, and passed an oil and gas long lateral bill, which will encourage more production and return more revenue. I also signed into law a new task force to develop recommendations for a better way to administer our school funding formula and school districts. A major accomplishment was the negotiated deal to bring an Amazon distribution center to Oklahoma City, thus allowing the state to collect new sales tax revenue from Amazon purchases. Looking ahead to next session, I know that if we work together, we can invest in Oklahoma and make it the best state in this nation. It can be a place where hard-working individuals and ambitious businesses can not just survive, but they can thrive.

By Gov. Mary Fallin Earlier this month, I introduced a plan to stabilize our state by beginning true, meaningful budget reforms and modernizing our state's tax laws. It cuts some taxes and raises others. To help our families, I proposed eliminating the state sales tax on groceries, which is expected to result in annual savings of $350 to $676 for a family of four. Cities and counties, though, will still have the option to keep the sales tax on groceries, thus not hurting city and county revenue. Our corporate tax is very volatile as it is hard to estimate with losses that can be carried forward. It will reduce the paperwork and red tape burden of many small businesses and boost economic development. It also would provide more transparency as it would eliminate the need for the Legislature to pick winners and losers with specific tax credits. Expand the Sales Tax Base The sales tax was first enacted in 1933 in Oklahoma to boost revenues. Many of our products and services we use today were not even created in 1933. Our economy has changed considerably since then, shifting from a manufacturing-based economy to a services-based economy. The way we impose taxes and collect revenue no longer reflects the current economy, but instead an outdated system that has not changed much since its inception. If we expand our sales tax base to better reflect our economy, we could lower the overall sales tax rate or income tax. Gasoline and Diesel Taxes Should Go to Roads and Bridges My tax reform will ensure taxes associated with roads and bridges are the funding source for maintenance of roads and bridges. It would not adversely affect the projects in the Department of Transportation's 8-year plan. Oklahoma ranks near last in gasoline (48th) and diesel taxes (49th). I am proposing a slight adjustment that would increase our gas and diesel taxes to the regional state average, but still below the national average. With our revenue shortfalls over the last several years, we have cut funding used to repair our roads and bridges. It is important to provide sufficient revenues to meet the basic responsibilities that our government owes to its citizens, namely: Improving Our Workforce and Educating Our Children A thriving, prosperous economy must have a skilled, educated workforce. That starts with good teachers in the classrooms providing our children a quality education FIVE days a week. We need to find a way to give our teachers a pay raise. We also know that a pay raise alone will not improve student outcomes. We have to ensure more existing dollars are reaching every classroom by tackling administrative inefficiencies head-on. Ensuring the Health and Public Safety of Oklahomans We must make public safety a priority. We can be smart on crime and tough on criminals. Approximately 26 percent of our current Highway Patrol troopers are eligible for retirement. We must prepare for the future and fund a trooper academy. While we're at it, no trooper should be furloughed or restricted to driving 100 miles a day because of lack of funding. Seventy-five percent of new admissions in prison are nonviolent offenders. The number of drug-possession offenders sentenced to prison with no prior convictions has more than doubled the last five years. Oklahoma spends too much money without positive outcomes locking up low-level, nonviolent people. Doing nothing means taxpayers must spend billions of dollars more to incarcerate more people, or risk federal intervention. There are many issues to contend with in health care, and O