Today, the Oklahoma Rural Association (ORA) released a new study examining the economic impact of the Energy Discrimination Elimination Act (EDEA) on Oklahoma’s municipal bond market. The study, “Unintended Consequences of the Energy Discrimination Elimination Act in Oklahoma,” which was commissioned by ORA and conducted by Dr. Travis Roach, an associate professor and chairperson of the Department of Economics at the University of Central Oklahoma and founder of the Central Policy Institute, showcases the detrimental impact of the EDEA on Oklahoma communities and taxpayers.
Notably, the new study finds that Oklahoma’s EDEA policy has resulted in:
- A 15.7% increase in borrowing costs for Oklahoma municipalities compared to non-EDEA adopting states.
- $184,777,344 in additional expenses for local municipalities since the policy’s enactment, or $10,869,256 per month of the policy’s tenure thus far.
- Increased borrowing costs, which negatively impact Oklahoma municipalities through:
- Higher taxes.
- Reducing expenditures in other areas.
- Delays or complete abandonment of projects intended to improve infrastructure and quality of life.
This impact is only projected to increase if Oklahoma’s EDEA policy remains in place and continues to restrict the competitive municipal bond market, further harming taxpayers.
“It is clear that the EDEA has caused an unnecessary increase in municipal borrowing rates, increasing costs, harming taxpayers, and resulting in municipalities paying more for less or canceling projects altogether. These unintended consequences are causing significant harm to Oklahoma communities and our economy,” said study author Dr. Travis Roach.
ORA president Monica Collison adds, “The negative impact of the EDEA on Oklahoma taxpayers and communities, including those in rural and underserved areas, was completely avoidable and, as the research shows, a direct, negative result of these failed policies. Any tax dollar unnecessarily spent is wasteful – especially to the tune of more than $185 million. Oklahomans deserve better, and we encourage our lawmakers to right this wrong.”
The EDEA, passed in 2022, prohibits certain financial institutions from doing business with public entities in Oklahoma based on specific banking policies. In compliance with the EDEA policy, Oklahoma lawmakers must maintain a list of financial institutions they deem “boycotting” the oil and gas industry. By limiting competition and tightening the competitive bond market, local governments are seeing hikes in interest rates, taxes, and an inability to complete projects.
To read the complete study, please click here.
To read more about the Oklahoma Rural Association, please click here.
