The May 23rd vote that changed everything, Part 1

For years, the conservative fiscal values of Oklahomans were upheld because state officials were unable to issue general bonded indebtedness without first receiving approval through a vote of the people. This is because Oklahoma’s Constitution requires a balanced budget and prevents debt issuance without a vote of the people.

This all changed in 1998 when in a 5-4 ruling, the Supreme Court wrongly stated that the Legislature could issue bonds without a vote as long as the bond buyers understand that the Legislature is under no obligation to repay the bonds.

In his dissent, Justice Opala opined, “For the first time, this Court gives its imprimatur to deficit spending by our legislative and executive officers.”

Justice Wilson claimed that the decision sounded the death knell to Oklahoma’s constitutional balanced budget provisions, and Justice Lavender warned that, “Our citizenry would be well advised to prepare for future large-scale deficit financing of capital projects by state officials.”

So, nearly fifteen years later, was the ominous prediction of the dissenting justices correct?

In 1998, the state carried approximately 318 million dollars of debt, or $95.20 for every Oklahoman (this was actually an increase from 1992 when the debt stood at just $4.54 per Oklahoman). Today, state government owes 2.6 billion dollars, or $694 for every Oklahoman. Every year, state government must make a debt payment of nearly 200 million dollars, and the debt will be on the books for many years to come. To put this into perspective, that 200 million dollar yearly debt payment could likely wipe out the need for 30 of the 50 categories from which the state collects taxes. Just eliminating the debt payment would account for over a half of the state’s tax categories, making them completely unnecessary.

Even in light of these facts, many Oklahoma politicians still lay claim to the fact that Oklahoma is much more fiscally responsible than the federal government because we have a requirement in the Constitution that our budget remain balanced. While Oklahoma’s financial situation remains much better than the federal government’s, as Justice Wilson pointed out, state government does not substantively adhere to the balanced budget requirement anymore.

Those dissenting justices might as well have looked into a crystal ball because they predicted the future very accurately.

Once free from the constraints of the vote of Oklahomans and their pesky conservative fiscal values, the Oklahoma legislature went on a debt-fueled spending spree and approved debt issuance after debt issuance after debt issuance.

I can recall feeling like the fiscal conservatives had just been run over by a truck each year as the politicians would wait until the end of the session and broker a deal by which debt issuance would go onto the books for years into the future.

It got so bad that I can remember that in 2008 there were only four of us in the House who voted against each of the bond issuances.

Each year, much of the session would be dogged by rumors of impending bond issuances which would inevitably pass late in the session, once the powerful politicians had negotiated a deal that benefited them.

Last year’s session started out as no exception, with the usual bond attempts well under underway, until a pivotal May 23rd vote changed everything. On that day, the House of Representatives may have forever changed history and flipped the balance of power back to the fiscal conservatives. But to learn the details, you will have to wait for the rest of this story in next week’s article.

Thank you for reading this article. Your interest and input are much appreciated. Please do not hesitate to email Jason.Murphey@hd31.org with your thoughts and suggestions.