Stopping Higher Ed From Incurring More Debt

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Over the years I have greatly enjoyed the opportunity to work with the Senators whose Senate districts overlap with House District 31. I have found that these Senators often share the common value of smaller and more fiscally responsible government, and I have always been happy to work with them to accomplish the goal of applying conservative economic principles to state government.

In 2008, one of these Senators, Senator Patrick Anderson asked me to serve as the House sponsor for his Senate Bill 1398. Anderson has always maintained that state government should avoid unnecessary debt and was concerned because the Oklahoma Regents for Higher Education were issuing millions of dollars of debt without legislative approval or approval from the voters of Oklahoma.

The regents have been issuing this debt as part of what is known as the real property master lease program. In past, apparently the Legislature allowed higher ed to start this program so that the regents could fix items such as roofs on buildings or replace air conditioning systems.

In 2008, however, we learned that the program was being used for superfluous items such as a very expensive scoreboard at the
University of Oklahoma’s football stadium. This fiscal policy seemed very irresponsible and Anderson proposed that we pass a bill to give the Legislature the ability to stop the regents if their efforts to issue debt grew out of control. This is what Senate Bill 1398 proposed to do.

Senate Bill 1398 was approved by the Legislature and signed by Governor Henry. It stated that any attempt by the regents to expend the higher ed master lease schedule could be rejected by the Legislature, provided we took action within the first 45 days of session.

This year, the regents again went too far in my view. Instead of just using the lease program to issue debt for maintenance items, the regents proposed incurring 40 million dollars of debt to build the new 45,000 square foot building on the UCO campus as the new office for the state medical examiner.

In recent years, the Legislature has considered taking up the issue of issuing bonds for the medical examiner project, but as the economic downturn occurred and with the dramatic swing in the Legislature to the fiscal conservative point of view, these types of bond issuances have become unpopular. It is clear the Legislature will not approve the bond issuance if asked to vote on it. If the Legislature is going to approve the construction of this new building, it should be with future surpluses that would allow the state to avoid issuing new debt or by dedicating a revenue source for the project. The state’s debt now stands at about 2 billion dollars, the payments on the debt seem to grow every year, and multiple legislators are becoming concerned that we have too much debt on the books.

The regents’ action of placing this project on their real property master lease program circumvents the legislative process and would issue the debt without a vote by the legislators. I don’t believe this was the intent of the master lease program.

While the legislature doesn’t get to vote to approve the expenditures on the master lease program, because of the passage of Senate Bill 1398 in 2008, we do have the ability with a majority vote of both the House and Senate to stop this proposed expenditure.

To that end, Senator Anderson sponsored Senate Concurrent Resolution 30 and on Friday I filed House Concurrent Resolution 1033. These mirror resolutions if approved would disapprove of this attempted debt issuance.

In fact, the whole lease program probably needs to be shut down.Higher education officials should budget for operational needs
without issuing debt. It is now clear that the program will always be susceptible to bad decision making that will continue to tag Oklahoma taxpayers with millions of dollars of unnecessary debt for many years into the future.

It upcoming years, it will be important for those of us who are fiscally conservative legislators to continue working to instill a
pay-as-you-go mindset in state government. Expenditures such as the new ME office should be paid for without incurring the unnecessary millions of dollars of fees and interest that accompany the issuance of debt.

It will be important for us to offer positive solutions to the valid needs of state government without forcing the taxpayer to incur more debt. One of those solutions will be the content of a future article.

State Representative Jason Murphey
2300 North Lincoln Blvd
Oklahoma City, OK 73105
1(405) 557-7350 (Office)


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