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Oklahoma's $1.3B Budget Hole Threatens School Bond Issues

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Creditors are concerned about Oklahoma’s $1.3 billion budget hole. That’s a problem for schools and potentially taxpayers.

Voters overwhelmingly approved capital improvement and transportation bonds totaling $27 million for Union Public Schools in February. Chief Financial Officer Debbie Jacoby said they were moving ahead with the second-highest bond rating on Moody’s scale until Gov. Mary Fallin made her budget proposals April 13.

"That evening, I received the email from Moody's saying, 'We're now, based on what the state is looking to do to manage the cuts, we need to re-evaluate your bond rating,'" Jacoby said.

Much like a personal credit score, a lower bond rating means a higher interest rate.

"It's our job to make sure our taxpayers who trust us to spend the money also trust us to manage the money and get a high rating so their taxes are as low as we can make them," Jacoby said.

Jenks and Tulsa Public Schools also had their ratings re-evaluated this month. Each of the three districts retained its rating and did not have to send bonds out for bid again. Jenks and TPS, however, had their outlooks downgraded from stable to negative because of the state’s financial situation.

Just the bond rating review is unusual.

"It's never happened before in my tenure of 22 years at Union and eight years at Tulsa Public Schools," Jacoby said.

Matt Trotter joined KWGS as a reporter in 2013. Before coming to Public Radio Tulsa, he was the investigative producer at KJRH. His freelance work has appeared in the Los Angeles Times and on MSNBC and CNN.