Oklahoma's Budget for Infrastructure Projects

Implications of Capital Projects for State Budgets
Like many other states, Oklahoma is faced with some serious problems with respect to a deteriorating critical infrastructure, including most especially the need for repairs and improvements on its roads and bridges. In response, the Oklahoma Long Range Capital Planning Commission has recommended a series of long-term capital projects through fiscal year 2024 that are intended to address the most serious of these infrastructural problems. The purpose of this paper is to provide a description and brief overview of the Oklahoma Long Range Capital Planning Commission, the size of the state for which it is responsible and its overall responsibilities. In addition, a description of the types of government projects and the implementation process that are involved is followed by a discussion concerning the respective advantages and disadvantages of the projects on the state’s operating budget. Finally, a summary of the key findings and recommendations about the effects of capital projects on operating budgets are presented in the paper’s conclusion.
Description and brief overview of the Oklahoma Long Range Capital Planning Commission
The Oklahoma Long Range Capital Planning Commission (hereinafter “the commission”) is comprised of nine members who are tasked with providing timely and informed recommendations to the Oklahoma legislature concerning what types of capital projects are most needed by the state (Oklahoma Long Range Capital Planning Commission overview, 2018). To this end, the commission provides the state legislature and governor with a series of proposed capital improvement projects and the corresponding annual fiscal year capital budget required to accomplish them (Oklahoma Long Range Capital Planning Commission overview, 2018). The commission is responsible for these capital budgeting activities for a state population of approximately 4 million people, representing an increase of about 5% from the 2000 census (Oklahoma population, 2018).
Description of the type of government project and implementation process
In its most recent capital improvement plan (2017), the commission provided the state legislature and governor with the list of recommended capital projects through fiscal year 2024, including $64,108,465 for public safety-related infrastructure initiatives. It is important to note, however, that these funds are intended to address the most serious infrastructure problems facing the state at present and for the next several years because the failure of any of the targeted projects will have serious implications for the state as discussed below.
Advantages and disadvantages of the project on the agency operating budget
The advantages of allocating sufficient funds to address the state’s most critical infrastructure problems are clear. Absent these efforts, residents of Oklahoma will be in imminent danger of having bridges collapse under them or roadways deteriorate to the point where they are even more hazardous than at present. In this regard, the commission specifically emphasized that it recognized the state was faced with some significant budget challenges in preparing its capital project recommendations, and based this funding requirement on the following criteria:
· Current conditions pose a danger to the health, welfare and safety of Oklahomans;
· Imminent failure is probable, if not likely, in the project or facility; and,
· Failure of the facility would result in loss of critical services and/or would incur significant costs for the state (Davis, Hall & Kasprett, 2017, p. 4).

In other words, failure to take action would end up costing the state even more in the future in terms of human and economic costs. Moreover, Oklahoma is an integral part of the nation’s critical energy infrastructure, and failures in the state would have nationwide implications. Indeed, the National Association of State Budget Officers (2018) stresses that, “State governments play a central role in building and maintaining the nation’s infrastructure. Financial decisions for infrastructure, or capital projects, impact public assets such as roads, bridges, university buildings, prisons, water resources and more” (Capital budgeting in the states, 2018, para. 3).
Notwithstanding these pragmatic advantages to infrastructure-related capital projects, the National Association of State Budget Officers (2018) also emphasizes that, “The operating impact of a capital project is an essential factor to consider when making an informed decision about proceeding with the project [because] capital projects can impose significant consequences upon the operating budget” (Capital budgeting, para. 4). In the context of Oklahoma’s capital projects, the disadvantages of these initiatives relate to the complexity of the analyses on which these budget estimates are based as well as prioritizing them appropriately (Capital budgeting in the states, 2018).
Summary of the findings and recommendations about the effects of capital projects on operating budgets
The research was consistent in showing that the budgeting process involved in capital projects at the state level is an expensive and complex enterprise that requires expert analyses and thoughtful projections based on a wide range of economic factors that are subject to significant changes throughout the duration of the budget (Weaver, 2011). The overarching recommendation that emerged from the research concerned the need to establish specific criteria for prioritization of capital projects taking into account their anticipated impact on day-to-day budgetary requirements.


References
Davis, J., Hall, K. & Kaspereit, D. (2017). State of Oklahoma FY 17-FY 24 capital improvements plan. State of Oklahoma. Retrieved from https://www.ok.gov/DCS/ documents/CapitalImprovementsPlan17-24.pdf.
Capital budgeting in the states. (2018). National Association of State Budget Officers. Retrieved from https://www.nasbo.org/mainsite/reports-data/capital-budgeting-in-the-states
Oklahoma population. (2018). World Population Review. Retrieved from http://worldpopulation review.com/states/oklahoma-population/
The impact of capital projects on the operating budget. (2018). Government Finance Officers Association. Retrieved from http://www.gfoa.org/impact-capital-projects-operating-budget
Weaver, S. C. (2011, January 1). Capital budgeting procedures, policy, and practices. Journal of Applied Finance, 21(1), 39-43.