The Bond Issue – More Barry than James

Part 3 of the current appropriations bill that the House is debating this week contains almost $500 million in capital improvement bonding projects.

A few random observations:

Bonds are debt. They aren’t appropriations of revenue as normally understood.

Bonds, though they are instruments that allow people to loan money to the state for interest, do incur issuance costs – much like closing costs when you mortgage your house. None of the issuance costs or parties involved have been disclosed.

None of the project details have been disclosed.

The current budget contains recurring revenue that was dedicated to the payment off old bonds that are now being paid off.

Between now and 2030, the accumulated recurring revenue from these paid off bonds will reach almost $2 billion.

The bond projects listed in Part 3 of the budget were compiled by a small group of legislators. The list had no input from the larger body of members.

No one has produced the overall priority list where these projects were drawn from – if such a list exists.

Questions:

Though interest rates are low, should we issue debt this particular year when we have much more pressing problems to address – like that road crisis thing?

Should not we know more about how the bond project list was created or what projects were not included before we send something of a blank check over to the Senate?

Or should we not just take advantage of the freed up recurring revenue from old bond payments and direct that toward DOT’s approved 6-year rolling priority project list – like the safety program or the bridge program?

Just imagine – we could use the money on those pesky safety projects that endanger peoples lives.

At least we would know what the money was spent on.

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