observing that “the framers of Oklahoma’s debt limitation provisions cannot be presumed to have anticipated a financially sophisticated society in which goods and services are purchased ... without a pledge of the full faith and credit of the state”
How later courts described this case
- observing that “the framers of Oklahoma’s debt limitation provisions cannot be presumed to have anticipated a financially sophisticated society in which goods and services are purchased ... without a pledge of the full faith and credit of the state”
- observing that appropriations-backed bonds do not “differ from arrangements where state buildings are rented by state agencies pursuant to multi-year leases”
- reviewing and sustaining Oklahoma statute authorizing Oklahoma Capital Improvement Authority to issue highway bonds secured by pre-paid user fees, direct taxes, and State Transportation Rainy Day Funds
- calling this exception “future installments for future services”
Written by the judges who cited it.
The opinion
WATT, Justice,
with whom LAVENDER, OPALA and ALMA WILSON, JJ., join, dissenting:
¶ 1 The majority, through its original decision and by its vote today, sanctions the State’s use of long-term debt financing without a vote of the people. The actions of the Legislature — and of the majority of this Court in ratifying them — do not simply whittle away at the clear protecting mandates of Article 10, §§ 23 and 25 of the Oklahoma Constitution, their actions gut the State’s balanced budget amendments. Pursuant to the majority’s rationale, the State will never create a legally binding obligation against itself if it issues bonds that contain certain “magic” language disavowing the creation of any such debt, regardless of the economic realities of the situation. No decision of this Court should rest upon such a fallacy.
¶ 2 What is particularly disturbing about the ratification of the current bond issue is that this is just the tip of the iceberg. Our citizenry would be well advised to prepare for future large-scale deficit financing of capital projects by State officials. Approximately two-thirds of the on-going one billion dollar road improvement legislation will be financed via these so-called “moral obligation” bonds. There is evidence in the record that suggests similar bonds for prison construction is next. The majority’s decision will serve as no legal impediment for the issuance of “moral obligation” bonds for any capital improvement project. The taxpayers will eventually be called upon to foot the bill.