A bond proposal to reboot the half-built $170 million American Indian Museum and Cultural Center in Oklahoma City continues to be a hard sell in the Legislature as lawmakers head into the final month of this year's session.
“At this point, I do believe that the only bond proposal that will be considered will be a proposal to repair, fix and maintain the state Capitol,” said House Speaker Kris Steele, R-Shawnee. “We're working on that particular proposal. We're not working on any other proposal at this time.”
Talks about a bond issue will get more serious as more attention turns to developing a budget and honing out a possible cut next year in the state's personal income tax rate.
Gov. Mary Fallin still supports funding the completion of the American Indian Center and Cultural Center and would support a bond issue as a mechanism for providing that funding, said Alex Weintz, Fallin's communications director. She has communicated that support to legislative leaders.
A bond issue for the center could be a key issue in negotiations between House and Senate budget negotiators and the governor's office that are under way as lawmakers grapple with appropriating about $6.6 billion for the 2013 fiscal year, which starts July 1.
They also are haggling over how much of a cut in the personal income tax — one of the state's key revenue sources; the GOP governor and Republican-controlled Legislature want a reduction next year in the personal income tax rate while Democrats mostly oppose it.
Legislators also are faced with deciding whether to increase the state's bond indebtedness — something the majority of conservative lawmakers oppose — by seeking bond issues for the state Capitol and other projects, such as the American Indian Museum and Cultural Center.
Lawmakers are required to wrap up their business by the last Friday in May.
Legislators have been reluctant to support bond issues the past couple of years. A Senate panel last year approved bond issues totaling more than $100 million for a building for the Veterans Affairs Department, a laboratory for the state medical examiner's office and to complete the unfinished American Indian Cultural Center but none were considered in the House of Representatives.
The American Indian Museum and Cultural Center announced earlier it has raised $40 million in private money to complete the project. Supporters of the center hope to finish construction and open the facility with $40 million in private contributions matched by $40 million in state funding.
The half-completed museum at the Interstate 40 and Interstate 35 junction has run out of funding. The state agency responsible for its completion has been trying to raise $80 million to complete the approximately $170 million project by 2014.
Any bond proposal for the American Indian and Cultural Center likely would have opposition from Tulsa members unless some type of financing is made available for a proposed Oklahoma Museum of Popular Culture in Tulsa. The center, in the concept stages for five years, would preserve stories of popular culture in Oklahoma.
Repairing the nearly 100-year-old Capitol appears to have the best chance of being financed this session, whether lawmakers approve a bond issue or appropriate some funds to make some of the repairs. It's estimated it will cost about $160 million to repair and restore the Oklahoma's crumbling building.
Covered scaffolding has been in place since September on the southeast entrance of the Capitol to protect those entering and leaving the building from falling pieces of limestone. Cautionary fencing also is in place along the south steps of the Capitol; those entering the building on the southeast side must use the handicapped entrance and walk under the 20-foot-long wood-covered scaffolding.
The precautionary steps were taken after an engineering firm found damage to the building's exterior limestone panels on the southeast and southwest sides of the building. It's expected that the damage exists throughout.
Estimates are for a cost of $5 million to $8 million, taking about 10 months to repair the exterior masonry. About 30 percent of the copper roof needs to be replaced, and the steps on the Capitol's south plaza are in poor shape. Other repairs include the building's electrical wiring and plumbing, much of it still in use since the building opened in 1917.
Steele said budget members have talked about a bond issue that could cost as much as $200 million that would include making repairs to state-owned buildings in the Capitol complex, including the Jim Thorpe Building.
Another proposal includes a new building for the state Veterans Affairs Department needs a new building, which has been talked about the past several years. The department is housed in a 70-year agency, and cost of a new building has been placed about $39 million.
Talks of a bond issue will be part of budget negotiations. Lawmakers have nearly $6.6 billion, or $168 million, or 2.6 percent, more than they had available a year ago to appropriate.
It will be a flat budget year for legislators. Although revenues are up, lawmakers used about $500 million of one-time funds to balance this fiscal year's budget of $6.5 billion.
Fallin and GOP legislative leaders have talked about cutting the top personal income tax rate of 5.25 percent next year as well as developing a plan to eliminate the income tax. But those proposals depend partially on eliminating economic tax credits, something they haven't done so far this session.
As a result, a cut of less than 1 percentage point in the rate is seen more likely than earlier proposals of up to 3 percentage points and hopes of eliminating the income tax — which brings in about 30 percent of the money lawmakers appropriate — have evaporated.
Other suggestions to make up for the approximately $2 billion in personal income tax include consolidating government services and seeking efficiencies as well as cuts in state spending. There's also a belief the cut in personal income tax will stimulate economic activity by businesses moving to the state and residents having more money to spend, but some economists have said that's all it is.
The state's economy is making a slow recovery after a couple of revenue shortfalls caused mostly by the national recession. Some lawmakers, mostly Democrats, have said most agencies need additional funding after having undergone three years of cuts.
The state collects a gross production tax on natural gas. If gas prices drop below a monthly average of $2.10 per 1,000 cubic feet, the gross production tax that the state collects drops to 4 percent from 7 percent.
State budget officials used a price of $3.64 per 1,000 cubic feet in determining revenue expectations for the 2013 fiscal year; it originally had set a rate of $4 per 1,000 cubic feet but reduced it earlier this year. Natural gas prices have hovered around $2 per 1,000 cubic feet recently.
Preston Doerflinger, who serves as secretary of finance and revenue, said the governor's office is concerned about the natural gas prices.
“But we do not anticipate that the natural gas situation will lead to a state budget hole in fiscal year 2013, just as it hasn't caused a revenue problem for the current fiscal year,” he said.