5 takeaways from Gov. Mary Fallin's State of the State Address

Gov. Mary Fallin kicked off the 2017 legislative session Monday afternoon, delivering her 7th State of the State Address. Here are five takeaways from the speech.

1. Sales tax reform

Fallin proposed eliminating the state sales tax on groceries, which she called "the most regressive tax on the books today." Fallin said the move would save a family of four between $350 to $676 per year. She also proposed modernizing the state's sales tax structure to better reflect the national shift from a manufacturing-based economy to a service-based economy. Expanding the state's sales tax base would allow lawmakers to eliminate the sales tax on groceries and could make it possible to lower the state income tax rate in the future, Fallin said.

2. Corporate tax elimination

Fallin also proposed eliminating the state's corporate income tax, which she called "one of the most volatile sources of revenue." She said doing so would reduce paperwork and red tape that burdens many small businesses in the state.

"Eliminating this tax provides more transparency as it also eliminates the need for the legislature to pick winners and losers with specific tax credits," she said.

3. Teacher pay raise

While she acknowledged that it wouldn't be a silver bullet for lagging classroom outcomes, Fallin called on lawmakers to enact a permanent pay raise for teachers.

"It is what the public and families want," Fallin said. "The pay raise may need to be phased in and it may be targeted, but it must be done."

In November, voters rejected State Question 779, which would have created a one-cent sales tax that would have funded a $5,000 increase in teacher pay. Several state lawmakers have pledged to work toward a permanent teacher pay raise during this year's legislative session.

The defeat of SQ 779 was not a statement against teacher raises; it was a statement that Leg must do its duty & produce a better plan.

— Senator David Holt (@davidfholt) November 9, 2016

4. Public safety

Fallin proposed reforms to the way the state handles its prison population, including a $50 million bond issue to fund new wings at a men's and women's prison dedicated to treatment and rehabilitation of substance abuse offenders. Fallin said that move  would help ease overcrowding at the state's prisons. Oklahoma ranks second in the nation in terms of incarceration overall, and first for incarceration of women.

"There is unprecedented conservative support on this issue from groups such as the American Conservative Union and Law Enforcement Leaders to Reduce Crime and Incarceration," she said. "Meanwhile, smart, conservative states such as Texas, Utah, Georgia, Kentucky and South Dakota are already headed this direction and these states have seen better public safety outcomes by pursuing similar reforms."

5. Healthcare

Fallin said her administration is working with local health care leaders to develop a plan to curb rising health insurance premiums and deductibles in the state. For those problems, Fallin blamed the federal Affordable Care Act, which Congressional Republicans are working to repeal. Fallin said she hopes to reduce regulations to create cheaper health insurance plans, encourage the use of health savings accounts and rely on local programs like Insure Oklahoma to provide "health insurance that works for Oklahomans."