Highway Bond Issue Could Squander Millions Needlessly, Senator Calls for Bond Deal to be Declared Invalid

Saying it could needlessly squander millions of taxpayers' dollars that would be better spent on new roads, a state lawmaker is calling for a massive highway bond issue to be recalled and declared invalid.

"You don't have to be a rocket scientist to realize that this is a very bad deal for the people of Oklahoma. The way it's set up bond underwriters are going to make a lot of money at the expense of Oklahoma taxpayers," said Senator Dave Herbert.

The Midwest City legislator is taking exception to the details of a bond issue approved by the Oklahoma Capital Improvement Authority last week. The OCIA voted to issue up to $325 million in bonds to help finance the $1 billion road construction program approved by the Legislature and Governor Keating earlier this year.

Under the terms of the bond issue, underwriters will be allowed a 2 percent discount and a .6 percent fee for services, an arrangement Senator Herbert contends will allow them an excessive amount of profit.

"There's absolutely no reason to give underwriters an additional discount when any person in the country would do this bond issue for the fee alone. Taxpayers are already paying the underwriter for services rendered, they shouldn't be forced to give him a multi-million dollar tip on top of it," said Senator Herbert.

"Underwriters aren't like waiters. They don't need or deserve a gratuity."

In a letter to the Senate President Pro Tempore today, Herbert requested that the bond issue be recalled from the Oklahoma Supreme Court so that it could be declared invalid.

"If we don't put the brakes on this thing now, we're going to end up flushing millions of dollars down the toilet. That's taxpayers money. We should either use it to build more roads or give it back to the people who paid it. It doesn't make any sense to give it to a bond underwriter," said Senator Herbert.