Oklahoma bank boycott has unintended consequences that hurt local communities | Opinion
In 2022, our state Legislature passed legislation that affected companies operating in and with the state by reframing the relationship between the state and those companies based solely on some corporate governance policies. While the laws were designed to prevent taxpayer dollars from going to companies that “boycott” Oklahoma’s oil and gas industry, the implementation has created inconstancies and has caused confusion to local governments and Oklahoma taxpayers that raise concerns about the bill and the need for further review.
More: Oklahoma may be hurting itself with a ban on some big banks and financial firms
The new law, which I believe was well meaning to make a statement and protect our most important oil and gas industry, has impacted the state’s Public Employee Retirement System, which was granted an exemption from complying with the law in August 2023. However, we need to review this legislation and study the long-term impact it might have on taxpayers and not only our state government, but city and county governments to operate efficiently and effectively with taxpayer dollars.
Limiting the pool of financial institutions that can fund the development of essential infrastructure could put critical projects in limbo, hurting local communities and hindering opportunities for job and economic growth. We want to protect, develop and grow our state oil and gas industry, however, we should be smart in a 21st-century economy to make sure we don't have policies in place that create unintended consequences. I am concerned because a recent study compiled by ESI (eConsult Solutions Inc.), a nationwide adviser on fiscal policy and development, showed that taxpayers could be burdened more than $49 million in additional debt due to reduced competition among financial institutions.
In an era where states jockey for prominence, bolstering Oklahoma's appeal to businesses and families is paramount. To maintain our competitive edge, we need to ensure taxpayers are getting the best value for their investments. The overly broad implementation of laws threatens to saddle Oklahoma taxpayers with additional debt. We should review and reform legislation passed that can uphold our commitment to the oil and gas industry, but also help taxpayers.
The tens of millions of dollars in additional debt due to higher interest rates could snowball into hundreds of millions if our state shuts out qualified lenders from financing public projects in Oklahoma. This risks creating an intractable fiscal challenge for our local communities.
I know there are current policy proposals during the legislation session, and it would be my hope that lawmakers should consider, at the very least, providing exemptions for local governments so they can maintain a variety of options in financing key public projects. Our state leaders would be wise to recognize that shutting out banks from doing business with local governments has serious financial consequences for Oklahomans and our business environment. Elected representatives should stand on our state’s strong tradition of limited government intervention to ensure the fiscal health of our local communities and residents.
Monica Collison is president of the Oklahoma Rural Association.
This article originally appeared on Oklahoman: Oklahoma bank boycott could put critical projects in limbo
