Tuesday, May 1, 2007

Paying Our Debts

As your Representative, I am committed to reversing the disturbing trend of state government going deeper into debt. By one estimate, the state owes approximately $25,000,000,000 in long term debt and unfunded liabilities.

I feel strongly that state government should avoid long-term debt. It is irresponsible for politicians to saddle citizens with millions of dollars of indebtedness and then allow the bill to come due when they are no longer in office. This places debt on the backs of our children and grandchildren and makes reducing the size of government difficult because government will be forced to keep taxes high in order to pay debt and interest.

As a representative, I have a policy of voting against the issuance of new debt and have called for the passage of legislation which makes incurring it more difficult.

One of the most egregious examples related to this issue has been inappropriate spending by past politicians who have raided the teachers' retirement system, leaving us with $7,000,000 of unfunded retirement system liabilities. This problem is similar to the difficulties now faced by the federal government due to previous raids on the social security fund.

One of the first steps we must take to end this abuse is to make it more difficult to occur. The house recently took a positive step by enacting the Oklahoma Pension Legislation Actuarial Analysis Act. This legislation would inhibit attempts by politicians who wish to raid the fund.

Now that an effort has been made in this direction, the house took action to rectify past abuse by again funding the retirement system.
In a recent vote, the House approved Senate Bill 357 to place 200 million dollars into the teachers' retirement system over the next five years. This will be done through increased contribution rates from education employers to be reimbursed by the state. Currently the rate is 8 percent for such employers, but within two years it would increase to over 9 percent. This plan would put the state on track to fund the teachers' retirement system at 80 percent in less than 25 years. Currently the system is a little under 50 percent funded.

If we can begin to repay this debt, it could improve Oklahoma's bond ratings, provide better rates on existing debt and save on interest payments. Hopefully, lower interest rates will not encourage Oklahoma's politicians to borrow even more.

If we are serious about rolling back big government and enacting important pro-growth reforms such as eliminating state income tax, the issue of big government debt is not one we can ignore. As it stands now, reducing the size of government is difficult enough because of past inappropriate spending by state politicians. The legislature must understand that while we must fund the debt we owe, it is our responsibility in representing the people to draw a clear line in the sand and defeat new attempts to mortgage the future of our children and grandchildren.

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