Gov. Mary Fallin will be among seven governors talking next week with the president about the effect the nation's looming fiscal cliff would have on the states.
Fallin, vice chairman of the National Governors Association, is among members of the group's executive committee who are to meet Tuesday with President Barack Obama in Washington, D.C.
“We're concerned about the federal monies the states receive, what kinds of cuts are we going to be getting to our state budgets,” she said. “We just don't know what Washington's going to do.
“If they don't come to an agreement over the next three weeks, … they're going to leave the states hanging,” she said.
Fallin, a Republican who last week rejected the Democratic president's proposals to expand the Medicaid health care program in Oklahoma and to establish an online marketplace for the uninsured to shop for health insurance, said politics won't be a factor in the trip, which is being arranged by the nonpartisan governors group.
“We have been telling Congress and we've been telling the president through the NGA that they must listen to governors because each state is different, unique,” she said. “We have our own problems that we deal with. … We don't want unfunded mandates passed down to the states.”
Other governors making the trip are Delaware Gov. Jack Markell, a Democrat and National Governors Association chairman, Arkansas Gov. Mike Beebe, Colorado Gov. John Hickenlooper, Minnesota Gov. Mark Dayton, Utah Gov. Gary Herbert and Wisconsin Gov. Scott Walker. Beebe, Hickenlooper and Dayton are Democrats. Herbert and Walker are Republicans.
What's at stake
It's estimated Oklahoma could lose $137 million in direct federal funding as a result of the fiscal cliff, or sequestration, which refers to automatic, governmentwide spending cuts set to take effect Jan. 1.
“I told all of my Cabinet secretaries months ago to take a look at all the federal monies that we receive in our various state agencies because we may well get cuts from the federal government because of the huge deficit that we have in our nation,” Fallin said, “and to be prepared to analyze where they would need to make those cuts.”
Tax cuts passed a decade ago and renewed in 2010 are set to expire at the end of the year. In early January, spending cuts totaling $1.2 trillion are scheduled to take effect, with most affecting the Defense Department.
“Income taxes are getting ready to go up if they don't address these issues,” Fallin said.
The White House released a report this week showing Oklahoma consumers would spend an estimated $2.2 billion less next year should federal income tax rates return to the levels of a decade ago. The average Oklahoma family of four with an annual income of $63,100 would see its tax bill rise by $2,200.
Fallin said she's concerned about the effect that cuts in military spending could have in Oklahoma, which has five military installations
“That would have a huge impact on our state,” she said.
A stalemate continues in Washington, with Obama wanting to extend all expiring tax cuts except those that apply to incomes over $200,000 for individuals and $250,000 for couples. Most Republican congressional leaders argue that would harm the economy and instead are pushing for specific cuts.
Oklahoma finance officials have said the $137 million in projected losses of federal funding includes $50 million in funding for education and more than $40 million for health and human services. Several federal funding streams would not be affected by the looming cuts, including funds for Medicaid, transportation, Social Security payments, food stamps and most veterans' programs.
Fallin said the uncertainty already is affecting Oklahoma.
“One of the things I hear constantly from the business community is that they're not making any major spending decisions, they're not buying equipment, vehicles,” she said. “Some aren't expanding because there's so much uncertainty in Washington. The uncertainty at the U.S. Capitol is one of the things that is holding back the national economy and why we haven't seen some of the improvements that we need in the high unemployment rate that we face as a nation.”