Reynolds Disagrees With State Bond Advisor

From The State House ~ Oklahoma government should not increase debt without a vote of the people in spite of the recommendations of the state bond advisor, Rep. Mike Reynolds said today.

"According to the Oklahoma Constitution, the voters determine our bonding capacity, not the bond advisor," said Reynolds, R-Oklahoma City. "His job is simply to ensure that bonds are issued in compliance with state law. He has no policy role and should not try to assume one."

In a Nov. 30 article in The Oklahoman, State Bond Advisory Jim Joseph noted Oklahoma's current bond payments consume 2.2 percent of the state budget and suggested that amount could be increased to 3.5 percent of government appropriations.

Currently, the state of Oklahoma carries roughly $1.5 billion in bond debt and appropriates $157 million per year to repay that sum.

While Joseph suggested the current debt service was relatively small, Reynolds said it already has a significant impact on all Oklahomans. "That's $157 million that's being diverted from our schools and roads each year," Reynolds said. "It's not pocket change."

According to the article, Joseph said the state could finance an additional $836 million in 25-year bond issues if debt service was increased to 3.5 percent of general fund appropriations. But Reynolds said there should be no increase in state debt without a vote of the people.

"State debt is passed on to our children and grandchildren and should not be increased without a thorough vetting and public approval," Reynolds said. "Just because we can increase our debt load doesn't mean it's a good idea."

He said assuming additional debt obligations could also derail efforts to shore up the state's financially drained retirement systems for teachers and other workers.

"We've got $14 billion in unfunded liabilities in our retirement systems that are a debt of the state even if they don't show up on the bond advisor's tally sheet," Reynolds said. "We can't ignore that problem. The Legislature needs to restrict our borrowing to no more than what the voters approve."

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