Oklahoma state bonds and leases would be capped at 28% of general revenue under a bill passed by the House last week.
House Speaker T.W. Shannon, R-Lawton, sponsored HB 2195, which will now be considered by the Senate.
The measure would prohibit the state from issuing new debt until some outstanding debt is taken off the books, according to Shannon.
“Simply put, this bill means the state’s debt load can only go down, not up,” he said. “With a credit limit in place, we can be better stewards of taxpayers’ money and avoid forcing unneeded debt on future generations.”
Shannon said the current outstanding tax-supported bond debt is just under $2 billion. The total does not include the nearly $12 billion in unfunded pension liabilities, he said.
Oklahoma should not issue any debt without a statewide vote, Rep. Mike Reynolds said during the floor debate on Shannon’s bill.
“The cap should be 0%, not 28%,” he said.
The State Board of Equalization last month certified $7 billion in general fund revenues in fiscal 2014.
A proposal by Sen. Josh Breechen, R-Coalgate, and Rep. Jason Murphey, R-Gutherie, would cap annual debt service at 4.5% of the previous five years’ average general fund revenue. That measure is set for House action this week.