February 4, 2014
The Tulsa World
By World's Editorials Writers

We found much to like in Gov. Mary Fallin's State of the State speech Monday.

We agree with Fallin's assessment that the state of the state is strong. While some of that has to do with the luck of commodity prices and geology, Fallin's leadership also deserves due credit.

When she came to office, the state had a $500 million budget hole and $2.03 in its "rainy day" fund. Today the state's budget is balanced and the emergency fund has $530 million in it. Meanwhile, unemployment and tax rates are down.

If Fallin takes some public pride in that turnaround, we say it is deserved.

In her plans for the coming year we are particularly pleased with her evolving attitude toward the Justice Reinvestment Initiative.

The initiative is a proven strategy for saving money on prisons while reducing crime. Fallin signed the Oklahoma version of the initiative into law in 2011, but allowed it to wither without funding.

With new leadership at the state Department of Corrections, Fallin has added money for the initiative and says she is looking forward to improving "smart on crime" efforts.

We support Fallin's proposal to move new state employees into a 401(k)-style defined contribution plan instead of the state pension fund. This wouldn't affect most state pension plans, including the one covering teachers, but it would put one of the state's biggest debt-troubled retirement plans on a path toward a sustainable future.

Fallin wants to adjust state compensation to emphasize higher pay and lower benefits. That would give state employees more freedom to make decisions about how to spend their earnings. A defined contribution plan will give workers more ownership of retirement fund decisions and make those retirement funds portable if they leave state employment.

It's a reformist move that parallels the direction private enterprise took decades ago.

We also support Fallin's call for a state bond issue and for targeting that effort toward state Capitol repairs.

We continue to call for scrutiny of the bond plans to make sure the Capitol costs are prudent. We want a safe, sanitary Capitol building, not a mink-lined one. That said, the wise way to finance those costs is over time in a bond issue.

Fallin's budget proposal needs close consideration.

She proposed a $50 million increase in funding for public schools and a 5 percent cut in funding to many agencies.

Both parts of that idea will be controversial. The school funding won't be enough for many people and the cuts in agency funding will be much too much for others.

Fallin seemed to recognize that when she said, "Those who like bigger government and higher taxes will say the sky is falling."

We don't like big government or high taxes, and we won't take our cues from bureaucrats. We want government to be big enough to accomplish the state's critical needs and taxes high enough to pay for those needs — no more. The critical test for Fallin's proposed budget--— and this isn't a judgment that anyone should make in an hour or a day --— is whether the Fallin plan meets those needs.

We remain skeptical of plans to continue cutting the state income tax. Fallin proposes cutting the tax by 0.25 percent, an amount most taxpayers wouldn't notice, but a big hit to state funding.

We urge Fallin and legislators to trigger any income tax reduction to increased state revenue and to reconsider tax reform aimed at eliminating giveaways that do not spur economic growth, especially tax breaks for horizontal drilling.

These sorts of efforts could make an income tax cut revenue neutral, assuring that schools, roads and public safety will not see any funding cuts as a result.

On balance, Fallin's speech was upbeat, conservative and filled with good ideas. We, along with the Legislature and the state's citizens, look forward to a close examination of the details and refining the draft into the best plan possible for our state.

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