DALLAS -The Oklahoma Legislature wrapped up its 2008 regular session late Friday by approving bills authorizing the state to issue a total of $475 million of bonds for roads, college professors, water control projects, and a Native American museum.
The House passed the final measure, which provides $100 million for the state's share of privately endowed university chairs, at 6 p.m. on Friday. The Legislature had been scheduled to adjourn earlier but extended the deadline until midnight.
The bulk of the bond package consists of $300 million that includes $275 million for state highways and bridges, and $25 million to establish a revolving loan program for county road projects.
The package also provides $25 million in bond proceeds to the American Indian Cultural Center and Museum in Oklahoma City, $25 million for low-water dams on the Arkansas River in Tulsa County, and $25 million to the Oklahoma Conservation Commission for flood control projects across the state.
Phil Bacharach, spokesman for Gov. Brad Henry, said the governor will sign the measures at a ceremony early next week.
The Oklahoma Capitol Improvement Authority will issue the road bonds in two sales of $150 million each, the first one in 2009 and the second in 2010.
Gary Ridley, director of the Oklahoma Department of Transportation, said proceeds from the bonds will allow the agency to put out bids and complete the work included in its eight-year road and bridge plan by 2014.
"This is a long-term solution to the critical shortfall that we currently have in our eight-year plan," Ridley said. "It also provides certainty and stability for our future planning."
The revised funding plan provides consistent annual increases until the highway maintenance fund reaches $370 million in fiscal 2016. The new plan guarantees a total of $2.3 billion for Oklahoma roads and bridges over the next eight years, up from $2.1 billion in the plan adopted in 2006.
Rep. Mike Thompson, R-Oklahoma City, chairman of the House transportation subcommittee, said the bond package provides funds for projects that could not be included in the fiscal 2009 budget due to a lack of growth in state revenue.
"This is the perfect scenario considering this tight budget year," Thompson said. "The department receives the money needed for the roads and bridges plan up front, allowing for construction cost savings and expedition of the projects."
The percentage of Oklahoma's general fund budget dedicated to debt service will decline, despite the $475 million of bonds authorized by lawmakers, according to James Joseph, the state bond adviser.
Joseph said the $175 million of non-road bonds cannot be issued before January 2009. The first $150 million of the road debt cannot be issued before August 2009, and the final $150 million cannot be issued before August 2010.
"That means we'll only have six months of debt service in fiscal 2009, and we won't begin paying debt service on the first $150 million of road bonds until fiscal 2010," Joseph said.
"If we don't issue any additional debt, the percentage for debt service would go from 3.38% now to a little under 3%," he added. "Of course we will issue more bonds, but we don't know how much more at this point."
Joseph said the state plans to issue $100 million of highway department grant anticipation revenue vehicles in the fall. He said his office is also in the process of arranging meetings with rating agencies for two public power authorities that will issue approximately $600 million of revenue bonds later this year.
The Grand River Dam Authority will take a $500 million issue to market by October, with approximately $330 million of the proceeds to finance the utility's purchase of a 36% interest in a 1,200-megawatt gas-fired generating plant near Luther.
The Oklahoma Municipal Power Authority is also expected to issue bonds to finance its purchase of a 12% stake in the plant.