Ladies and gentlemen, guests, fellow oklahomans, the governor of the great state of oklahoma, governor mary fallin. [applause] gov. Fallin thank you. Lieutenant governor lamb, statewide elected officials, speaker mccaul, president pro tem shultz, members of the court, honorable senators, representatives, cabinet members, our tribal leaders, guests, and citizens of the state of oklahoma. It is my pleasure to be here with you today as we discuss the state of the the state of our state. I am joined today by my husband, wade christianson, and our wonderful cldren,hristina and adam and our daughterinlaw elizabeth and other family members. Welcome, guys. [applause] i look forward to working with our new legislative leaders, pro tem schultz and mccaul, and house leaders. I want to thank our legislators for all your dedication and commitment to better government. I especially appreciate the second bond issue enacted last year to renovate this wonderful, irreplaceable building in which we now gather. You might have heard a little construction noise, i asked if theyd mind to stop while we while i gave my speech today. Well celebrate its 100th birthday on june 30 and we have planned a great celebration for it. This is my seventh year ive had the pleasure of delivering the state of the state message and we have accomplished a lot. I plan to be just as productive in my remaining two years. In a book on leadership by stannle toer, it is written, great leaders are never satisfied with the current levels of performance. They are relentlessly driven by possibilities and potential achievement. Those who try to do something and fail are infinitely better than those who do nothing and succeed. Today i want to talk about what we can accomplish to give hope to our state and to chart a course for a better future. There is no question that the dramatic downturn in our Energy Sector and an increased loss in our sales tax revenue from Online Shopping the last couple of years has affected both our state and both our private and public sectors. But we are a resilient state. Made of strong people with a long, proud history of facing challenges head on and coming out in a better place. We love our families and strive to improve our economy. We are patriotic. And respect our Law Enforcement officers and veterans. We value our freedoms and our liberties. In preparing this speech, i thought about our strengths, which i just mentioned, along with our weaknesses, our opportunities, and our threats. Oklahoma will continue to struggle if we dont fix our structural deficits in our budget. [applause] a well withrepresented c. E. O. Of American Express is fond of paraphrasing a quote attributed to napoleon. Leaders define reality and provide hope. So as our states top leaders, lets focus on the reality of our state budget deficit. For decades, we have attempted to balance our budget for too long with the use of onetime funding resources. We cannot afford to pass another budget using a large amount of nonrecurring revenue. It is important to provide sufficient revenues to meet the basic responsibilities our government owes its citizens. [applause] and here they are. Educating our children. [applause] ensuring health and Public Safety for our people. And preserving and improving our infrastructure. [applause] now, no one can argue that these are not fundamental state services, and our ability to provide them to oklahomans reliably and efficiency is not cutting it. Government in and of itself does not create jobs, but it should provide the right environment to grow the economy through a free market system unfettered by burdensome regulations. It is our responsibility to prepare a plan and a workable budget for longterm solutions to the challenges that our state faces. We must deliver services that work for the people and put people over politics. Go right ahead. [applause] lets face it. The continued uncertainty of our budget affects not only the Services Services we provide to our citizen bus also the effectiveness of our government. So lets Work Together to get the job done, to ensure the best outcomes for our people. Knew, to do so, we now, to do so, we need to invest in oklahomas future. So what do we do about it . Well, today im proveezing a series of bold reforms to stabilize our state regarding both our recurring revenues and repairing the structural deficit of our budget. We must put oklahoma on a Solid Foundation for its future. This proposal represents a modernization of oklahoma tax laws that will ensure new growth in years to come so we will have the flexibility to prioritize our spending on new, emerging needs. This plan eliminates the most regressive tax on the books today, the state sales tax on groceries. [applause] this will benefit all oklahomans. Eliminate the state sales tax on groceries is expecting to expected to result in annual savings somewhere between 350 to 670 for a family of four. It also gets rid of one of the most volatile sources of revenue, the Corporate Income tax. [applause] it will work to reduce the paperwork and red tape burden of many Small Businesses in our state and boost economic development. Eliminating this tax provides more transparency as it also eliminates the need for the legislature to pick winners and losers with specific tax credits. Third, sales tax modernization. R many decades, when the Legislature First complicated, excuse me, contemplated the sales tax laws to boost revenues we did complicate it too by the way. Sometimes it comes out what youre really thinking on your mind. Right, justices . All right, lets start that back again. For many decades ago, when the Legislature First contemplated the sales tax laws to boost revenues, the economy depended on the manufacture and sale of goods. As the economy in the United States has shifted from a manufacturing based economy to a Service Based economy, the way we impose taxes and collect revenues no longer reflect ours current economy. But instead an outdated system that has not changed much since its inception. So by expanding the sales tax base, this allows us to eliminate the state sales tax on groceries and the Corporate Income tax and it may be possible in the future to further lower the sales tax rate. [applause] to improve the health of our state, im also again asking you to raise our cigarette tax. Smoking [applause] smoking remains the number one cause of preventable death in oklahoma. It costs our state 1. 6 billion in health care costs. Now the revenue raised by this can be spent on other Current Health care needs. Next, for decades, we talked about how gasoline and diesel taxes should go to roads and bridges. My tax reform plan does that. My plan ensures that taxes associated with roads and bridges are the Funding Source for the maintenance of reds and bridges, period. What this does is return the individual income taxes to the general revenue fund. This plan does not, by the way, impact the department of transportations eightyear plan. It will stay intact. Oklahoma currently ranks 48th in diesel tax in the nation and 49th in gasoline tax. So im proposing a new revenue stream by increasing our gas and diesel taxes to the Regional State average, but below the national average. By trading out the use of individual income tax to a gas and diesel tax dedicated to roads and bridges this budget change dramatically improves the percentage of revenue collections this legislature will be able to control. As we discussed for decades, lets put fuel taxes to roads and bridges. [applause] by working together and avoiding distractions, we can solve todays problems and make oklahoma grow and prosper. First, to improve the work force and education, we we talked about that, as of august 21, 2016, there were more than 71,000 open jobs in the state of oklahoma. Of these, almost 18,000 are what we call critical occupations such as engineers, teachers, nurses, chemists, accounts and truck drivers. Therefore in my budget im providing 20 million for Higher Education programs for critical occupations. [applause] a thriving, prosperous economy must have a skilled, educated work force. And that starts with good teachers in the classroom providing our children with a quality education five days a week. [applause] and my budget provides for both. [applause] in a recent meeting i hosted with some Major National science Location Companies an executive asked me how he could persuade businesses to come to oklahoma when some of our schools have fourday education weeks. We must have five day school weeks. [applause] now, lets act on a per innocent pay raise for Public School on a permanent pay raise for ublic school teachers. [applause] its what the public wants and its what our families need. The pay raise may need to be phased in, and it may be targeted but it must be done. However, we also know that a pay raise alone will not improve student outcomes. We have to ensure that more existing dollars are reaching the classrooms by tackling administrative inefficiencies head on. [applause] we have a very top heavy system that needs to be reformed to provide teachers and students more resources. The state already provides a number of services that schools could voluntarily take advantage of to save money, such as our i. T. Services, our purchasing, and bonding assistance. So in addition to that, im creating a task force to review the state Education Funding formula, to evaluate Funding Sources and to analyze the k12 system footprint. Just as we must fix our states budget structural issues, we must do the same for our k12 Education System. [applause] our Education System must be focused on creating the best outcomes. To do so, we must ensure more money goes to the classrooms and to teachers. We must empower students and parents by giving them more choices so they can best address their own needs. [applause] we must be accountable to the taxpayers on how we spend our education dollars. Second, Public Safety. We need [applause] did i wake you up, commissioner . He liked that part, didnt he . He was awake, im just teasing him. Hes been ringing off my phone so here we go, commissioner. This is your mart. Your part. Public safety. We need to keep our families and our communities safe. Last fall, a dangerous man named Michael Vance jr. Traveled across oklahoma on a deadly crime spree for a week. Law enforce. Was desperate to find him and to stop him. He was spotted in a rural area cte cntinesrn okho. Trpebrn o snzdre 0 le a t w fm oklg cntinasrn okho the. Ivg aa ghatf ee trpeosnzched vce do aar raloalong tisatlar o ndie wlexcnging gunshots with vance who had an ak47. Im sure youve seen the video, its pretty incredible. Trooper costanza, along with other troopers who helped pursue and apprehend vance. Troopers chris hanover, im going to ask these guys to stand as i call your name. Trooper chris hanover, trenton kiesler, brandon stewart, mica whittington, along with sirgil, r pilots brian and cole patterson, along with trooper brian costanza. Will you please stand and let us thank you for your service. [applause] thank you to all our Law Enforcement officers and their families who make sacrifices to keep us all safe. We appreciate you. Now, approximately 26 of our current hired patrol troopers are eligible for retirement. We must prepare for the future and fund a trooper academy. [applause] and while were at it, no trooper should be furloughed or restricted to drive 100 miles a day because of lack of funding. [applause] my budget accommodates these issues. Investing in Public Safety isnt just about investing in oklahoma highway patrol. Its also about investing in ways to be smarter smarter on crime and tough on true criminals. [applause] its no secret our prison population is in a crisis with over 61,000 people under the jurisdiction of corrections. Our prisons are way overexass way over capacity and our prison population is expected to grow by 25 over the next 10 years. Oklahomas overall incarceration rate is the second highest in the country. We lead the nation in female incarcerations, incarcerating women at 2 1 2 times the national average. Now contrary to what some of you may think, oklahoma women are not meaner. [laughter] without reform, oklahoma must build or lease three new prisons, an expensive proposition even in the best of times. We would need two new prisons immediately without any further reform this year. So that is why i created the Oklahoma Justice Reform Task force to find datadriven, modern crime policy to focus on improving Public Safety. [applause] 75 of our new admissions in prison are nonviolent offenders per statute. The number of drug possession offenders sentenced to prison with no prior convictions has more than doubled in five years. My budget includes new money for corrections and treatment which includes a 50 million bond issue to build wings on a mens and womens prison for Substance Abuse offenders and rehabilitation. [applause] now, there is unprecedented conservative support on this issue from groups like the America Conservative Union and law enforce. Leaders to reduce crime and incarceration. Meanwhile, smart on crime states, conservative states such as texas, utah, georgia, kentucky, and south dakota are already headed in this direction and states have seen better Public Safety outcomes by pursuing these types of reforms. As the president and c. E. O. Of the Greater Oklahoma chamber of commerce said, oklahoma spends too much money without positive outcomes locking up lowlevel, nonviolent people. [applause] the Business Community supports the governors efforts and encourages the legislature to seriously consider these recommendations and then he went on to say, doing nothing means taxpayers must spend billions more to incarcerate more people or risk problematic federal intervention in our system. While im talking about Public Safety, send me a bill to fix the real i. D. Licenses. [applause] we have four months to solve this issue, lets get it done. Third, health. As i said in my second inaugural speech, our Health Outcomes are holding us back as the as a state and the status quo is not acceptable. As a result, i convened a group of Health Care Leaders from throughout the Health Care Industry and the State Government to ensure that we are improving Health Outcomes and the quality of health care and controlling costs. There are too many issues to contend with in health care and obamacare has created additional problems we must address. Health care premiums are increasing at a dramatic rate. Deductibles are so high people can scarcely afford their Insurance Coverage that they have purchased, and the regulations that have been handed down from the federal government are creating added costs with very limited benefits. So with the help of our local Health Care Leaders, we are developing a plan that we will submit to the new administration to fix the problems we have seen in oklahoma. We hope to reduce regulations, to create lower cost insurance plans, encourage investment and private in private Health Accounts so people can direct their health care purchases and utilize successful local programs like our insure Oklahoma Program to provide health Insurance Coverage that works for oklahoma. Now while we are fixing our broken health care system, we can never take attention away from preventing illnesses in the first place. Lets not forget that too. Ppus fothe ncoin t no o steruli frtrtu s imyudt vedeifdurtas mt esngrgtee, on wi aonrosatoddss th. Eyncdeew darenof al l se nosou naon aretaon, d prinacits ke coecon mtaheth veleffrsustoama fe what ie outlid das a reisc,esnsleayo puousten suesul pa. 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