Published: May 22, 2008 01:11 am            

State on right road for bond issue bargain, officials report

Enid legislators have mixed emotions about a $475 million state bond issue agreed to Wednesday by Gov. Brad Henry and legislative leaders.

The largest part of the bond issue would feature a $300 million package dedicated to roads and bridge improvements. State transportation officials have said failure to boost road funding would threaten about $275 million in improvements in the state’s eight-year road and bridge construction program.

Another $100 million will be set aside to pay the state’s share of endowed chairs at state colleges and universities.

The bond issue also would provide $25 million for flood control projects, $25 million for bridge and dam improvements along the Arkansas River and $25 million to complete Native American Cultural Center in Oklahoma City.



Left in the dark



State Sen. Patrick Anderson, R-Enid, who has voiced opposition to a bond issue at this time because of the bond market, said Wednesday afternoon he did not know the details of the agreement.

“I’ve not heard any details about how we will pay off the bond issues, what revenue sources we have to pay them off, the terms, the years or the interest rates. None of that has been shared with the Senate,” he said.

Senators were not the only ones in the dark.

Agreement on the bond package was announced Wednesday morning but many details were not made public as Henry and leaders in the House and Senate continued to negotiate specifics about the plan. Talks ended shortly before 7 p.m. and were scheduled to resume today.

“We are very, very close. We’ve got an agreement in principle,” Henry said.

Rep. Ken Miller, R-Edmond, who chairs the House Appropria-tions and Budget Committee, said there is a dispute over the details but it’s being worked out.

Officials declined to disclose the nature of the dispute and whether it involved the largest portion of the bond plan, $300 million for road and bridge improvements.



Still opposed



Anderson said he remains opposed to a bond issue this year. He said he is concerned the state does not have revenue available to pay off the bonds. If the state enters a long-term obligation, he said he fears it will jeopardize funding for schools, child welfare issues and other necessary obligations. He called it a short-term solution.

“I think the bond issue proposal is more political than practical, and I hope the Legislature is very careful in the final hours of the session in evaluating whether this is the best action to be taken on behalf of the taxpayers of Oklahoma,” he said.



How it will work



A $7.1 billion standstill budget approved by lawmakers last month included no new money for roads and bridges, although it was the goal of many House and Senate leaders. Officials have said they want to perform road and bridge projects sooner rather than later because of the escalating cost of fuel, material and equipment required to do the work.

As proposed, bonds on the road portion of the package would be issued in two phases, and bond debt service would be funded by growth in revenues from motor vehicle collections amortized over 15 years.

State Rep. Mike Jackson, R-Enid, said the plan is the one forwarded by the House. On average, he said, motor vehicle fees increase 3 percent a year and conservatively figured at 2 percent would be enough to pay off the $300 million road and bridge issue.

Additional parts of the issue would be paid from general revenue. Some bonds passed during the Gov. Frank Keating administration have expired, and additional money has been freed to pay for the road portion of the issue, Jackson said.

“I’m always cautious to borrow money for expenditures. I believe the road and bridge program includes counties and state programs and funds the entire eight-year period,” he said.

Jackson said considering a 4 percent bond rate and the rate of inflation, construction will save between $50 million and $60 million by front-loading the plan. That is important for both residents who use the roads and bridges and for businesses who utilize them, he said.

“It’s good to get it done quickly, because it will save money due to inflation on steel, concrete. It’s so high the bonded indebtedness is actually less in terms of interest rates,” he said.

Jackson also said infrastructure programs like conservation dams, which protect homes in Enid and other areas, are important. Many were built 50 years ago, and are in need of repair, he said.



Non-emergency qualms



State Rep. John Enns, R-Enid, said he has mixed emotions about the issue.

“Roads and bridges and flood control structures I’m good with. We have problems in that area with the rain we’ve had. If we don’t do something it will wash out more bridges and roads,” he said.

Enns said he has a problem with Native American Cultural Center and the endowed chairs, which he said are not emergency issues.

“This is for emergency stuff, not for stuff like that,” he said.

The road and bridge proposal is based on a Republican plan to remove a funding trigger for new spending on roads and bridges and to increase the cap on new road and bridge money.

Legislation passed two years ago authorized $17.5 million a year in new spending on roads and bridges and another $32.5 million if economic growth pushed state revenue up at least 3 percent over the prior year.

The plan would remove the trigger in 2010, eliminate the $17.5 million floor appropriation under existing law and provide roads and bridges with a consistent $30 million increase in funding each year until the cap in new funds is reached.

The plan also would increase the road fund cap from $270 million to $370 million by 2016, with that amount allocated each year afterward. Under the plan, roads and bridges would receive $2.3 billion in appropriations over the next eight years.



The Associated Press contributed to this story.