OKLAHOMA CITY (AP) — Oklahoma would not be able to issue more bonds to fund repairing the Capitol or completing other unfinished state projects — at least, not until some of the current debt is paid off year — if legislation approved by the state House on Thursday becomes law.
The proposal from Republican House Speaker T. W. Shannon would restrict state debt in bonds and leases to 28 percent of general revenue, which is at least $5.3 billion for the current fiscal year, according to estimates from the Board of Equalization.
The state currently holds about $1.5 billion in tax-supported debt, which means Shannon's plan would leave little leeway for additional bonds until current bonds are paid off. The bonds are used to fund major, one-time public projects.
Supporters described the legislation as a fiscally responsible move, saying it would limit future debt to current levels. But opponents said it was an unnecessary limit on future bond issues.
Rep. Mike Reynolds, R-Oklahoma, went further by saying the Oklahoma Constitution prohibited any debt without voter approval.
"The cap should be zero percent, not 28 percent," Reynolds told his colleagues before the vote. "Is there anything in committee for a proposal to send a bond issue to the vote of the people? Because that would solve the problem."
Senate Republican leader Brian Bingman also voiced concerns, saying after the vote that imposing a limit would harm Oklahoma's bond ratings and increase service payments. He pointed to Sen. Josh Brecheen's proposal to limit debt service payments — basically interest payments on bonds — to 4.5 percent of the previous five years' average general revenue.
Brecheen's bill was scheduled for a vote Thursday but it didn't come up, likely pushing the vote to next week.
Jim Joseph, Oklahoma's state bond advisor, has said Brecheen's proposal would allow enough new debt to fund several pending projects, including renovation and repair of the state Capitol building, estimated to cost $150 million, and the still-unfinished American Indian Cultural Center and Museum in Oklahoma City.
Joseph told The Associated Press he hadn't had a chance to study Shannon's bill imposing the percentage limit, but said if it worked as its supporters claimed, it would indeed be more restrictive than Brecheen's measure.
The House passed the bill 78-17, sending it to the Senate.