OKLAHOMA CITY — It’s been more than two years since yellow barricades and scaffolding sprang up outside Oklahoma’s Capitol building to protect visitors from mortar and pieces of limestone falling from it.
Inside, debate continues among lawmakers on how best to finance repairs to the nearly 100-year-old Capitol’s exterior, antiquated plumbing, electrical wiring and other features.
Some favor a bond issue to raise money for the repairs, which officials estimate could cost up to $160 million. Others support a pay-as-you-go approach that would tap annual state revenue and avoid creating new debt for the state.
Mixed into the debate are financing proposals for two other building projects; the half-finished American Indian Cultural Center and Museum on the banks of the Oklahoma River in Oklahoma City and a proposed museum in Tulsa devoted to Oklahoma popular culture dubbed OKPOP. Each of those projects is estimated to cost about $40 million.
While lawmakers debate financing options for the projects, there is little debate about the need to repair.
“Each project is a stand-alone. Each one will have to be vetted and debated. Our priority, of course, has to be the state Capitol,” said Senate President Pro Tem Brian Bingman, R-Sapulpa.
“The main thing is we can’t ignore it any longer.”
“I don’t think anyone questions the need to make repairs to the Capitol building,” said Rep. Jeff Hickman, R-Fairview, a candidate to succeed former House Speaker T.W. Shannon, who had opposed a bond issue. “It’s unsafe. It’s an embarrassment. Obviously, something needs to be done.”
Rep. Mike Jackson, speaker pro tem and acting speaker who is also a candidate to replace Shannon, said repairs to the Capitol are a higher priority than any other building project.
“The biggest issue, of course, is the Capitol building, and that does need to be addressed,” said Jackson, R-Enid.
The Capitol’s deteriorating condition was also noted by Gov. Mary Fallin, who threw her support behind a bond issue to pay for repairing it in her State of the State speech to kick off the 2014 Oklahoma Legislature.
“This building has become a safety hazard,” Fallin said. “We are doing a great disservice to our state and its citizens by allowing the Capitol to crumble around us.”
A detailed examination of the building found a concrete beam above the south portico that is crushing the brick that supports it as well as antiquated piping and electrical wiring that are original to the building. There is also extensive cracking of the terrazzo floor in the building’s lower level.
State Bond Advisor Jim Joseph said bond indebtedness is not an issue in Oklahoma and that the state has plenty of bonding capacity to afford a bond issue. More than 41 percent of the state’s bond indebtedness will come off the books in 2018, and more than 86 percent will be eliminated in the next 13 years.
“I think we have capacity for additional borrowing,” Joseph said. “Our ratings are strong. The market’s good. The sooner we borrow, the better.”
The Capital Improvement Authority, which provides buildings and facilities for state government offices, has 27 series of bonds outstanding for a total of $1.16 billion. Previous bond issues have financed a number of road projects as well as buildings that house the Attorney General’s Office, the Oklahoma Judicial Center and other agencies.
As of January, the state’s annual debt service limit for all bond programs was about $265 million. The state currently pays about $165 million a year in debt service, meaning it has about $100 million in additional annual debt service capacity.
Joseph estimated that at current interest rates, debt service on a $160 million bond issue for the Capitol would be just $10.1 million a year over 25 years.
Issuing bonds allows money for a project to become available almost immediately and avoids tying up revenues for state agencies and programs on a large pay-as-you-go capital project, Joseph said. The state is already projected to have $170 million less in revenue this year than it did last year.
“The downside is you pay interest,” Joseph said. “No one wants to pay interest.”
Bingman said repairing the Capitol will extend its useful life for another 50 or 100 years.
Anyone who is buying a home with a mortgage knows what it is like to buy something over time.
“We’d all like to have cash and go pay for your house,” Bingman said. But lawmakers are faced with a variety of funding priorities with scarce revenue every day.
Hickman was the author of legislation last year that proposed a statewide vote of the people on a proposed $200 million bond issue to repair the Capitol and other state assets. The measure cleared a House committee but was not brought to a vote on the House floor.
“It’s a discussion that we need to have within our caucus to figure out what the caucus wants to do,” Hickman said.
Jackson said members of the House’s Republican majority have indicated they would consider a bond issue.
“That being said, I think it’s a very tough sell to sell a bond issue,” he said. “I’m always willing to listen and look at other ways to lead. I think that we can come up with a solution at the end of 2014 that Oklahomans will support and our body and hopefully the governor and Senate will support, too.”
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