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Tax cuts, Medicaid dominate final day of Legislature

OKLAHOMA CITY (AP) _ The 2005 Legislature adjourned Friday after lawmakers hammered out details of the state's first $6 billion budget, finalized the largest tax cut in state history and passed a Medicaid funding bill demanded by doctors and hospitals.

Gov. Brad Henry ordered lawmakers back next week for a special session after 11th-hour negotiations on workers' compensation reform fell apart. The Legislature, which convened on Feb. 7, was required by the state Constitution to adjourn by 5 p.m.

House Speaker Todd Hiett, R-Kellyville, and Senate President Pro Tem Mike Morgan, D-Stillwater, urged Henry to convene a special session to work out an agreement that eluded lawmakers during the Legislature's four-month run.

``I hope nobody had any vacation time scheduled next week. We may be busy,'' said Hiett, who said failure to pass workers' compensation and lawsuit reform were disappointments in an otherwise successful session. He said lawsuit reform will be a top priority in 2006.

Lawmakers opened the special session on Friday and will reconvene on Tuesday.

Henry gave lawmakers a ``B+'' for their efforts and said he will promote them to an ``A'' if they pass workers' compensation. He said he has not ruled out adding other issues to the special session.

``No legislative session ever addresses every challenge facing the state, but this year we did make significant progress on many issues important to Oklahomans,'' the governor said.

The head of the state workers union gave the lawmakers an ``F'' and said they ignored critical public service needs, including a shortage of prison guards and patient-care assistants at state veterans centers.

``All we get is excuses from legislators who are far more concerned with pandering to voters than dealing with the people's business,'' said Gary Jones, executive director of the Oklahoma Public Employees Association.

Members of the House and Senate worked frantically to complete the state's $6.2 billion budget _ the largest in state history _ on the final day of action in a Legislature that authorized record levels of spending for public education and a $500 million higher education bond package.

``This truly was an education session,'' Morgan said.

``We're going to be able to meet the needs of a whole lot of students better than we have in the past,'' said Sen. Johnnie Crutchfield, D-Ardmore, Senate appropriations chairman.

Lawmakers missed a self-imposed deadline to fund education first when the House and Senate disagreed on a general appropriations bill to fund state government. State law requires lawmakers to complete an education budget no later than April 1, but it took another six weeks to hammer one out.

Instead of a general appropriations bill, lawmakers passed individual bills to fund about 80 state agencies. Many of the spending bills were passed in the final days of the Legislature.

Public schools received $170 million more for the fiscal year that begins July 1 than the previous year, including $54.8 million for the first year of a four-year plan to raise teacher salaries to the regional average and $22.4 million to fully fund a benefits package that pays 100 percent of teacher health insurance costs.

Lawmakers also approved $24.6 million for all-day kindergarten classes and passed an accountability package that Hiett said will demand more from teachers and students.

On Friday, lawmakers approved an $11.4 million supplemental appropriation to help schools offset increased costs from a $3,000 teacher pay increase that went into effect in 2000.

The Legislature authorized a $500 million higher education bond package following weeks of haggling between Henry and leaders of the House and Senate.

The bond issue will pay for 140 higher education projects in 36 communities, employing an estimated 4,000 construction workers and generating more than $737 million for the state's economy. The projects include classrooms, laboratories and research facilities.

A total of $25 million of the bond package will be carved out to accommodate a bond bank that Hiett wanted to fund future capital needs at colleges and universities.

During the final week, lawmakers approved a transportation funding plan that will pump $170 million more each year into the state's road and bridge maintenance budget without raising taxes.

Transportation officials have said the state has an $8.4 billion backlog of road and bridge needs. More than 3,000 miles of Oklahoma's 12,266 miles of highway need to be repaired or replaced and about 1,600 of the state's 6,728 bridges are either structurally deficient or functionally obsolete.

Lawmakers completed a $150 million tax cut package Friday that also includes a plan to return $100 million in excess revenue in rebates this year. The tax cuts will reduce revenue by $58 million in 2006.

``We passed a tax cut that I think helps every Oklahoman,'' said Sen. Jay Paul Gumm, D-Durant, Senate finance chairman. ``No Oklahoman will be left out of this. Those at the lower end of the scale and those at the higher end will see something.''

The plan includes a $108 million income tax cut that reduces the maximum tax rate from 6.65 percent to 6.25 percent. Opponents said the tax cuts will benefit only the wealthiest Oklahomans and could hamper public services.

The package also increases the standard deduction on state income taxes from $2,000 to $4,000 for most taxpayers.

The House and Senate voted overwhelmingly Friday to spend $63 million in natural gas revenue to leverage almost $200 million in federal funds for Oklahoma's Medicaid system. The plan provides money for just one year, and a permanent source of Medicaid funding must still be found.
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