DALLAS - Lawmakers in both houses of the Oklahoma Legislature are discussing plans for a multimillion-dollar bond issue that would provide additional funds for efforts stalled by the state's standstill budget for fiscal 2009.
No official action has been taken, not even a decision on whether to formally propose a state bond issue. However, several legislators have circulated lists of bond projects that could serve as the basis for more formal talks.
The Legislature last week approved a fiscal 2009 budget that provides most state agencies with the same level of funding as in the fiscal 2008 budget, and sent the $7.1 billion measure to Gov. Brad Henry. Henry was expected to sign the budget bill late yesterday afternoon.
Deputy state treasurer Tim Allen, the spokesman for Treasurer Scott Meacham, said talks on the size of the bond issue could get under way when the budget is signed. Meacham is the governor's chief negotiator in budget talks with the Legislature.
"There are no negotiations between the Legislature and the governor right now. Hopefully that will happen as soon as the budget is signed," Allen said. "There are some ideas being floated around, but the negotiations have not begun. When they do, the governor will be involved."
Senate Democrats have prepared a list of proposed bond projects that totals more than $700 million. A similar list developed by Rep. Guy Liebmann, R-Oklahoma City, chairman of the House Transportation Committee, totals $443.6 million.
"Right now all we have are my figures," Liebmann said. "I think in the next week or two we'll have something more concrete that we can discuss,"
The House list includes $227.5 million for road and bridge repairs over the next eight years. Other proposed projects include $50 million for maintenance efforts at state buildings, $38.3 million to build a new facility for the state Veterans Affairs Department, $30 million for flood control projects, and $25 million for the American Indian Cultural Center and Museum in Oklahoma City.
Liebmann said a $450 million bond package would cost the state $32 million a year in debt service for 20 years.
Bond-financed projects proposed by Senate Democrats include $300 million for state highways, $100 million for county roads, $135 million for a statewide radio network for law enforcement agencies, $125 million to support endowed chairs at state universities, $45 million for the American Indian cultural center, and $16 million for upgrades to the state Supreme Court building.
Sen. Johnnie Crutchfield, D-Ardmore, co-chairman of the Senate Appropriations Committee, said proceeds from a bond package could provide some flexibility in the state's tight budget.
"We can all breathe a sigh of relief that state agencies didn't see a cut in their budget, but we also need to recognize there continues to be needs we were unable to address with this agreement," he said. "I am hopeful in the remaining days of session we can find a way to address those needs."
The Legislature is scheduled to adjourn May 23.
James Joseph, the state bond adviser, said it is up to the Legislature to decide how much debt the state can support.
"Every year we develop a schedule showing total debt service as a percentage of the unrestricted general fund, which is the best way to gauge our bonding capacity," Joseph said.
If the Legislature determines that the proper level for debt service is 3.5% of the general fund, Joseph said, the state could issue an additional $650 million of 25-year bonds or $490 million of 15-year bonds.
"In fiscal 2008 our debt service was $97 million, or 3.3% of the unrestricted general fund," Joseph said. "If no additional bonds are authorized, debt service will drop to 2.73% of the general fund in fiscal 2009."
Oklahoma's GOs are rated A1 by Moody's Investors Service and AA by Standard & Poor's. However, most of the state's debt consists of lease-revenue and appropriations-backed issues, with very little outstanding GO debt.
