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Fallin vetoes parts of state budget fix

Oklahoma legislators had barely flipped off the lights in the Capitol when Gov. Mary Fallin undid most of the work of a contentious special session and said she would ask lawmakers to come back and try again.

The Republican-controlled Senate agreed Friday to a compromise to cobble together a budget through even deeper cuts to state services, rejecting Fallin's warning that the approach would set the state "up for failure."

The Legislature adjourned from its eight-week special session after the Senate voted, and Fallin announced she had vetoed "most of the revised budget bill" but had "kept intact parts of the bill that temporarily preserve funding for key health and human services until lawmakers return in another special session to approve long-term funding solutions."

After the House of Representative approved the current budget bill, Fallin warned the Senate that a veto might be in the cards.

"I have told our legislative leaders that I would veto any bill that makes severe cuts of $90 million or more to state agencies and spends the $83 million in cash reserves," she said Wednesday. "'When a budget bill comes to my desk, I will need to review any additions or changes to what has previously been discussed with our leaders."

Her review didn't take long. By 8 p.m. she had announced the veto and said she would call another special session.

The House and Senate had finally agreed on a bill that would avoid cuts to critical state services, including the Department of Corrections, the Department of Health and K-12 education. It also gave the Oklahoma Department of Health $30 million in new funds that officials say is needed after an apparent mismanagement of funds within the agency was discovered earlier this month.

But the proposal called for 1 to 2.5 percent cuts for most agencies  above the cuts already put in place in the budget adopted in the regular session  and used carry-over funds and agency revolving funds to fill the rest of the shortfall. Included was a $17.3 million, or 2.2 percent, reduction for higher education.

In addition to the $60 million in cuts, the bill called for the use of $23 million in leftover funds from last year and $60 million in agency revolving funds to shore up the state's budget.

That, combined with the $23 million in rainy-day funds the Oklahoma Legislature has already approved and a bill to raise $48 million by increasing gross production taxes on a limited number of older wells would fill the $214 million budget hole that was created when the state Supreme Court ruled that a $1.50-a-pack cigarette tax increase approved in the waning days of the regular legislative session was unconstitutional.

The governor announced she had vetoed all but five of the 170 sections of the budget bill.

"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," she said in a statement. 

The governor said the veto keeps intact 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, and also would "provide funding for the short term" for the Department of Mental Health and Substance Abuse Services, the Department of Human Services and the Oklahoma Health Care Authority that were to receive the bulk of the cigarette tax.

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