Recap: Chairman's Breakfast with Gov. Fallin
She is the 27th governor of the state of Oklahoma, but the first female to hold that office. Elected to office in 2010, Gov. Mary Fallin will be stepping down in January, due to term limits.
Fallin said she has enjoyed working on numerous projects with the Greater OKC Chamber over the past eight years, as she spoke on a wide range of issues she has faced during her time in the state’s highest office at the Chairman’s Breakfast Event held at the Cox Convention Center.
“The people in this room are the ones who create jobs, invest money in our community and are certainly the ones who make good things happen in Oklahoma City,” she said as she stressed the importance of economic development efforts.
“Our job, at the state capitol, is to make sure that we do everything to create the right business environment for you to be able to advance, grow, flourish and create jobs and opportunities for our fellow Oklahomans,” she told the nearly 500 business leaders in attendance. “The last thing we want to do is stifle your growth, stifle the growth of Oklahoma City and of our state.”
Fallin said that is why she, and other elected officials, pays attention to the Chamber’s annual legislative agenda.
“I know that you spend a lot of time and effort working on issues that matter to the business community,” she said. “I’m sure some of you have wondered, do we actually read your agenda, do we actually pay attention to those things?”
By way of an answer, Fallin provided some brief legislative highlights that proved that the state legislature is listening to the business community.
“We actually have one of the better business climates in the nation,” the governor stated. “That’s proved out by a lot of our rankings and statistics, both for our city and our state.”
Fallin discussed several major issues that are important to the business community, including workers’ compensation, tort reform, economic development, transportation infrastructure, a skilled workforce, education, substance abuse and mental health, water quality, the state budget, teacher pay, diversification of the state economy and criminal justice reform.
“We’ve been able to make some great improvements in that,” she said, referring to workers’ compensation. “Lost cost rates have dropped by 60 percent. That’s helpful, isn’t it? In fact, over the last five years, we’ve seen rate reductions and, this past year, we had a 16 percent reduction.”
Regarding tort reform, the governor touted passage of major lawsuit reforms to cap non-economic damages a couple of years ago. “We have moved from being ranked 42nd in the country to 33rd in the country in reducing frivolous lawsuits.”
The governor recognized the importance of retaining the economic development tools that help create jobs and opportunities that keep Oklahoma City and the state competitive.
“We’ve been able to keep things like the 21st Century Jobs Act, the Aerospace Engineers Tax Credit and the Quality Jobs Act, with our legislative efforts, to make us very competitive and be able to recruit business from other states,” she said.
The governor noted that unfunded pension liabilities had been cut nearly in half and, though many business leaders may think that doesn’t really impact them, the reality is exactly the opposite. Why? “Because, if you look at Illinois; you look at some of the other cities like Dallas... At one point, Dallas was saying they might have to go into bankruptcy because of all their unions and their unfunded pension liabilities. To be able to shore up your unfunded liabilities and your pension system and to put them on a more stable path, which we have, is very important to our state, for recruiting business and to the business community.”
She also recognized the value of economic development incentives and established an incentives review committee, saying, “It’s up and running to see which different types of incentives create jobs and create investments.”
Another issue that is important to the business community is transportation infrastructure. “One of the things that’s always been a top goal was to fix our structurally deficient bridges,” Fallin said. “We were always one of the top five states in the nation for structurally deficient bridges, something I wasn’t very proud of.”
Thanks to a road and bridge building program, the state has seen major improvements in the condition of roads and bridges. “When I took office, we had 706 structurally deficient bridges,” she said. “At this date, still having other bridges in the pipeline to fix by the end of the year, we’re down to 184 from 706. Big improvement!”
The governor recognized that having a better-skilled, qualified workforce is of vital importance for recruiting and retaining jobs. According to Fallin, employers have indicated that they have job openings, but are unable to find the “right type” of employee. Or degreed adults say they have been unable to find a job.
“So we launched a program called Complete College America and we set a goal to have an additional 1700 degrees and certificates granted every year above the normal, which is 30,000, and we surpassed that,” she said. “Over the past seven years, we’ve added an average of 2,700 additional degrees every year on top of what we’ve always had. So we have close to 10,000 new degrees and certificates over the past seven years in our workforce, which helps us retain companies that are so important to Oklahoma’s economy.”
“The other thing your business community has told me, when it comes to aerospace, energy, biomedical, health sciences, technology, you need more STEM graduates in our workforce,” added the governor.
To address that need, Fallin has held a Governor’s STEM Summit each year and, since 2010, the number of STEM-related degrees has increased by 47 percent. But OKC and the state have faced other recent education issues.
“We started grading our schools so we know how they perform,” Fallin said. “It was a little controversial but I think we’ve got that fire tamed and we’re doing much better so we now know how our schools are performing.”
Ensuring that students could read at grade-appropriate levels is another important education issue that the governor addressed. She said that, due to the Reading Sufficiency Act, Oklahoma saw a major improvement in reading scores for students moving from third to fourth grade.
And education is just one slice of the state budget pie, which included a contentious debate over teacher pay raises, the so-called Rainy Day Fund, and mechanisms to fund core services.
“Back in 2011, we had pocket change on our rainy day account, we had $2.03. That’s all we had, $2.03,” she said. “We had a $600 million budget shortfall, we were at about 6.9 percent unemployment, not a very good time for Oklahoma.”
Gradually, things turned around. Partly due to an improving economy and partly due to a tightening of the belt, by 2014 the rainy day account had grown to $560 million. A good thing, because the price of oil was about to tank, taking Oklahoma’s economy with it, costing the state nearly 26,000 jobs.
From a budget shortfall of $1.3 billion in 2106 to last year’s $869 million shortage, the rainy day fund has helped to mitigate the negative fiscal impact. “Our economy is slowly, but surely, recovering,” according to Fallin. “Now, we’re down to a $167 million shortfall, better than $869 or $1.3 billion, but we’re moving the needle in the right direction to close our budget gap.”
Fallin lauded the efforts of a coalition of business leaders who “stepped up” to offer a plan that would have addressed the budget shortfall, while providing a teacher pay raise and reforming some of the ways that the state government functions. The plan would have paid for core services like education, health and human services, public safety and corrections. The measure didn’t pass, but, as the governor said, it “came pretty close.”
The governor indicated that the state legislature continues to consider several of the reform measures contained in the “Step Up” plan, but said that one of the major challenges to any revenue-producing legislation is the highest approval threshold in the nation, 75 percent.
“Most states are about 60 (percent.) We’re at 75, so that’s what it’s been such a very challenging year for us legislators and you’ve gotta have help from both parties. It can’t just be the majority party, it has to be both parties that are bringing that solution forward,” she said.
So, what’s next?
“In 2017, $6 billion in new investment in our state, which is huge. 3500 new jobs. 2016, $2.2 billion in new investment, which tells us we’re doing things right when it comes to our pro-business environment and our workforce.”
As the governor said, “2018 is off to a pretty good start!”