While avoiding more bonded indebtedness, the state has been refinancing debt to leverage better interest rates. Miller cites net savings of nearly $11 million from recent refinancing. Annual payments on principal and interest of state bonds comes to about four cents of every dollar appropriated from the general revenue fund.
Jim Joseph, the state's bond adviser, says Oklahoma could borrow as much as $300 million for new bond issues without affecting the state's credit rating. We would argue that not issuing new bonds for projects such as Capitol repairs and a facility for the state medical examiner's office will adversely affect credit ratings by signaling that the state is deferring projects that will get more expensive over time.
The state does have a debt problem in one area — public pensions. Oklahoma ranks 33rd among the 50 states in its unfunded pension liabilities. That's actually an improvement.
What's not improving is the resistance to incurring more debt for capital improvements based largely on the perception that voters can't distinguish between Washington's profligate ways and Oklahoma's modest borrowing practices. Not all debt is equal. Leadership requires making the right decisions that may cause political heartburn.
In Washington, the issue is the metaphorical fiscal cliff. In Oklahoma, we should be worried about a literal cliff that develops because we failed to spend money to prevent it from developing.