OKLAHOMA CITY, Oklahoma - "Oklahoma will continue to struggle if we don’t fix the structural deficits of our budget,” Oklahoma Governor Mary Fallin said in her State of the State address Monday.

She focused on Oklahoma's $868-million budget shortfall during her State of the State address Monday, which opened the new legislative session.

The governor proposed raising taxes on tobacco and fuel while eliminating the state sales tax on groceries.

Fallin said, "This will benefit all Oklahomans. Eliminating the state sales tax on groceries is expected to result in annual savings somewhere between $350 to $676 for a family of four.”

The governor also committed to a teacher pay raise of $1,000 a year, but some wonder if there will be money to pay for it.

The pay raise was in the same speech as new tax cuts; but they're more than offset by tax increases on cigarettes, fuel and dozens of services.

Fallin’s speech got plenty of approval from her largely Republican colleagues - especially when she mentioned a pay raise for teachers.

“Let's act on a permanent pay raise for our public school teachers. It's what the public wants and is what our families need," she said.

Freshman Republican Senator Joe Newhouse said the pay raise is a top concern.

“We're very committed to our teachers, as the governor stated. It might be incremental allotments, but we want to work towards teacher pay raise,” he said.

Fallin's budget director, Preston Doeflinger, said the $1,000 raise is not dependent on a specific corresponding tax increase.

"We fully realize this just begins the conversation," she said.

Veteran Democrat representative Eric Proctor liked the teacher pay increase and the grocery tax decrease mentioned in the speech, but warned that all new spending would come from new taxes.

“There will be a coalition of moderate Republicans and Democrats who won't stand for a $1.1 billion tax increase for middle-class families,” Proctor said.

The speech is just the beginning of the budget process and it won't be final until the end of May.

Republican Senator Dave Rader said, “I'm anxious to see how things come forward and which issues we're going to attack first.”

While teachers and state troopers were singled out by Fallin, other state employees said they've been left out of the conversation. They haven't had pay raises and their numbers are down too.