The Enid News and Eagle, Enid, OK

Local and State News

October 24, 2011

‘We’ve got to do something’: State representatives struggle to find funding for repairs to Capitol building

ENID — With a crumbling state Capitol building, a run-down headquarters for the state’s Department of Veterans Affairs and a medical examiner’s office so cramped and outdated it lost its national accreditation, lawmakers say Oklahoma’s list of capital improvement needs is approaching $1 billion.

But even with the state’s solid bond rating and moderate debt-to-revenue ratios, conservative lawmakers, particularly in the House, are not eager to embrace a state bond issue to fund many of the repairs and new construction projects some say desperately are needed.

Area leaders say any debt accrued must be for items that are most vital for the state.

Sen. Patrick Anderson, R-Enid, said borrowing money becomes a problem when there is a limited amount of funds to pay that off.

“There is a reluctance in the legislature to take on any more indebtedness because of the economic situation we’re in,” he said. “We’ve done a pretty good job, but we have a lot of bond indebtedness out there.”

Anderson said the state is “the same boat” as many individuals and cannot go into debt without a way to pay for it.

Projects such as the Capitol building, the Veterans Affairs headquarters and state medical examiner’s office are going to take priority.

“It’s obvious we’ve got to do something,” Rep. John Enns said, referring to the capitol. “We can’t allow our buildings to get into totally deplorable shape.”

Enns, R-Enid, said he would like to find another way to complete some of the projects without going further into debt, but does not know whether that is possible.

“If we can find a better way to do, it let’s do it, but at this point I don’t know what that other option is,” he said.

Rep. Mike Jackson said it was important to continue to make improvements to infrastructure, but some projects would have to wait.

“We have to be vigilant in making sure that we’re not overextending our current budget,” he said.

Jackson, R-Enid, said the $1 billion list of items needs to be responsibly addressed.

“There’s not enough room to address all those issues without affecting our bond rating, and that’s one thing we don’t want to do because that will ultimately cost us more as tax payers,” he said.

Rep. Jason Murphey, R-Guthrie, who considers himself among those with a strong distaste for taking on additional taxpayer-backed debt, said the idea of more debt is an unpopular one among many leaders.

“There’s a reason that you’ve seen the number of approved bond issuances drop off in the last few years,” he said. “Especially with all the freshmen elected in 2010, voting for indebtedness isn’t politically acceptable in a lot of areas in Oklahoma now.”

The Senate has been more eager to support the idea of issuing bonds for various projects. A Senate panel earlier this year approved bond issues totaling more than $100 million for a new building for the Department of Veterans Affairs, a new laboratory for the state medical examiner’s office and to complete the unfinished Native American museum in Oklahoma City. But none of those proposals were even considered in the House.

“On the House side, I’ve found the members are very reluctant to consider a bond proposal,” said Rep. Earl Sears, chairman of the House Appropriations Committee. A $100 million transportation bond proposal that was a key component of last year’s budget package narrowly passed the House by one vote, even after an agreement had been reached with the Senate and the governor’s office.

Sears, R-Bartlesville, said he’s compiled a survey he plans to send to all of the House members asking them what projects they favor and whether they would support a bond issue. Other projects included on that list are a backlog of about $250 million in endowed chairs at the state’s colleges and universities, a new facility for the state Department of Mental Health, new museums in Muskogee and Tulsa, and improvements to various state buildings and National Guard facilities across the state.

Sears said he’s also not opposed to sending a bond proposal to a vote of the people, although it’s too early to determine which projects might be included in such a plan.

The Senate Appropriations Committee met for an interim study last week and heard presentations on the infrastructure needs of state buildings, including the Capitol, and from State Bond Advisor Jim Joseph on the state’s current debt level.

Joseph said Oklahoma’s ratio of debt service to unrestricted general revenue is a little more than 4 percent, a conservative figure that puts the state in a solid position with the major bond rating companies.

“We’re very highly rated,” Joseph said. “Our overall debt burden is not what I would consider a concern, and obviously not a matter that the rating agencies consider a concern.”

And although interest rates currently are low, Joseph said Oklahoma’s net debt service payments are scheduled to ramp up over the next several years because of some bond refinancing done in recent years during the state’s budget crisis.

“In 2010 in particular, we did some restructuring to create budget relief,” Joseph said. “We pushed some of the debt out to future years.”

In fiscal year 2013, Oklahoma will pay about $160 million in net debt service, but that will increase to $188 million in 2014 before it begins to drop, Joseph said.

Oklahoma could issue as much as $300 million in new bond debt without it affecting the state’s credit rating, Joseph said.

Because of the low interest rates and the state’s solid debt position, the state certainly has the option of addressing some much-needed infrastructure needs through a bond issue, said Sen. David Myers, chairman of the Senate Appropriation Committee.

“We probably have some bonding capacity that we can utilize,” said Myers, R-Ponca City.

Improving the state Capitol, where pedestrian traffic has been diverted because of falling pieces of mortar and limestone, and the Oklahoma Department of Veterans Affairs building, where mold and water leaks have been discovered, is a priority, Myers said.

“In my own estimation, if your Capitol is falling down, that’s got to be one of your top priorities,” he said. “If the buildings are causing health problems for the people who work there, then those have to be considered at the top of the priority list.”

Staff Writer Cass Rains and The Associated Press contributed to this story.

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