OKLAHOMA CITY - Calling the $750 million dollar lease-back road program fiscally unsound, State Senator Dave Herbert today unveiled an alternative funding proposal.
"I'd be among the first to agree that Oklahoma would benefit tremendously from additional infrastructure development. But a lease-back scheme between the Turnpike Authority and the Transportation Department is not the way to go.
"We're going to make a bunch of bond-dealers rich, and risk having to cut programs like education, or turn free-roads into toll-roads," said Herbert, D-Midwest City.
Instead, Senator Herbert has developed a proposal which could ultimately fund even more roads and highways than the lease-back plan.
"What we're talking about is a pay as you go system. It's really very simple. It calls for depositing a set amount of money every year for ten years, at an estimated interest rate of six percent. The first year we wouldn't touch that fund. Each of the subsequent years of the plan, half the balance would be withdrawn to pay for road construction," explained Herbert.
"Because of the carry-over and the interest, by the third year we'd have more funds available for construction than we were actually depositing. That amount would continue to increase each year of the plan," said Herbert.
Senator Herbert said based on an annual deposit of $43 million dollars, the state could pay for a $478.7 road building program. An annual deposit of $75 million would result in a $835 million dollar construction program.
"And that's paying cash. Plus, not a dime of that would go to pay lawyers, financial advisors or bondsmen. It all goes to build roads," said Herbert.
The Senator pointed out that the lease-back program depended on growth revenues to pay the bond debt.
"But what if something happens and we don't have those growth revenues? The answer is more toll roads or deep program cuts. But you can bet the bondsmen and lawyers would still be just as rich," said Herbert.
"That's not why the citizens of this state sent us to the Capitol."- 30 -