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Debt? Democracy decides Thursday, Oct 27, 2005 By John Brummett There's this exercise in direct democracy coming Dec. 13. Gov. Mike Huckabee scheduled it amid seasonal distractions to try to limit participation to better facilitate the outcome he desires. Direct democracy is when the people decide an issue themselves in an election, rather than rely on the principles of our republic to let the elected representatives decide. Direct democracy worries me, especially at its epidemic proportions as in California, and even in a state with a legislature as bad as ours. Even a bad legislature can amend a measure before considering it. In direct democracy, the voters must take what they're given and choose "yea" or "nay." But there's wisdom to one thing we do in Arkansas - requiring direct democracy to amend our constitution and as a necessary step before the government goes in debt. The latter is what this election concerns Dec. 13. It's to decide whether to go hundreds of millions of dollars in debt to improve highways faster than we could improve them otherwise and let our public colleges and universities make jump starts in their physical and technological infrastructures. The governor is for it. He sees this as part of his legacy, along with ARKids First, the CHART plan and easy car license renewal. That's why he's called the election. The state constitution forbids pledging the full faith and credit of the state without the people's prior approval. I thought I'd tell you how I'm decided in one case and leaning in the other, and share my reasoning. You can take it as a recommendation, reject it as same or, even better, ponder it objectively in the formulation of your own responsible view. It's important, yes. But to be honest, we'll survive either way. These are proposed refinancings, and I'll start with the much-bigger, which happens to be the one I'm sure I'll vote for. That's the highway bond proposal. In 1999, with our interstate highways the worst in the country, Huckabee and the Highway Commission agreed to call an election to authorize the Highway Department to borrow up to $575 million in bonds based on federal highway money certain to flow in the future. The federal Transportation Department encouraged this mechanism. The voters overwhelmingly approved. Interest rates were favorable. Freeways have been splendidly restored. Now, the idea is to reauthorize bonds up to that $575 million so that we may continue improvements as we pay down principal or if we exercise the option to call the bonds in 2010. Here are the two downsides, and my responses: Yes, this is a perpetual cycle of debt. But the only thing that would interrupt it would be a federal budgetary catastrophe or, I suppose, the Lord's return for Judgment Day. Second, it is true that we could do a lot of these improvements by paying as we go and sparing ourselves the interest. But that would only improve segments of roads. Spending more all at once would improve the system. Now, to the college bonds: They would dedicate $24 million a year in state general revenue for years to come - that being the state sales and income tax money that otherwise could go mostly to public schools or Medicaid, our most pressing needs. Therein lies one of the concerns. We should be cautious about obligating future general revenues with a major public school court case pending and a health care cost containment crisis looming. The other concern is that colleges already raid the strapped state treasury for capital improvements. Each biennium, their local legislators, trying to aggrandize themselves at home, carve out their portions from so-called surplus money in the General Improvement Fund. I'm inclined to think colleges and universities ought to take one or the other - bond proceeds supported by future general revenue, or biennial appropriations for capital projects from surplus general revenue - but not both. Actually, I'm more opposed to the biennial GIF raid than the bonds. But there's no way to get today's legislators, much less tomorrow's, to make a binding commitment to give it up. By the way, colleges and universities always maintain the option to hit up rich alumni for naming rights for new buildings and endowments. ------- John Brummett is a columnist for the Arkansas News Bureau in Little Rock. His e-mail address is jbrummett@arkansasnews.com; his telephone number is (501) 374-0699. |
