Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 21, 1992 TAG: 9202210485
SECTION: EDITORIAL PAGE: A-6 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
GETTING IT TOGETHER FOR BONDS
THERE'S NO lack of consensus in Richmond that a general-obligation bond issue is needed to revive Virginia's moribund capital-improvements program and help jump-start the state's economy. The nay-sayers, who last year included Gov. Douglas Wilder, have come round to supporting this most sensible concept:Cash in on Virginia's reputation for financially sound management and its good-as-gold credit rating. Borrow money to build higher-education facilities and other important public projects that have been languishing on the drawing boards. By committing to a capital program now, the state can take advantage of the depressed construction industry to build at the lowest possible cost and, at the same time, can help the economy by creating thousands of new jobs. Into the bargain, Virginians get the facilities now, when they're needed. We pay as we use, retiring the debt over many years.
Its merits notwithstanding, a bond proposal may still be rejected by voters if it lacks the unified support of the state's leadership. Historically, reluctance to borrow runs deep in the Virginia psyche. Debt is a four-letter word, made less attractive by observing the feds' fiscal irresponsibility. The go-ahead for only two general-obligation bond issues in modern times (in 1968 and 1977) was hinged to a broad-based, enthusiastic campaign by respected state leaders. Voters will be looking for that again.
It is important and commendable, therefore, that the governor and legislators, Democrats and Republicans, are joining ranks in calling for a bond issue. The problem is that consensus in support of the concept has yet to translate into consensus behind a specific proposal. Currently, regarding the size and timing of the issue, method for its approval, type of projects to include, and the means of drawing resources to pay off the debt, Virginia's leaders aren't singing from the same hymn book.
The 40-member Senate, including its 18 Republican members, has voted unanimously for a $594 million bond proposal also backed by Wilder. It is largely the handiwork of Senate Majority Leader Hunter Andrews of Hampton (whom the governor opposed on this issue last year). The Senate package includes projects at colleges, parks and mental hospitals, and will require no tax increase. Leaving aside the package itself (which is small and stretched out), it's remarkable that Democrats and Republicans, and Andrews and Wilder, have put their differences aside in support of the measure.
The 100-member House, meanwhile, has voted 63-35 for something more ambitious: a $1 billion proposal fashioned by House Majority Leader Richard Cranwell of Vinton.
Cranwell's is a plan around which voters in every region of the state might coalesce - while singing "Here comes Santa Claus, here comes Santa Claus." Adorning this Christmas tree are baubles for everyone: colleges, parks, mental-health facilities. Plus road projects to get Northern Virginians to the party. Plus a shiny angel on top - money to alleviate school-funding disparity for poorer school divisions. Voters can have it all - providing they agree to raise taxes on themselves by approving, in a referendum, a half-cent increase in the sales tax.
This is a big proviso. As with Christmas tree lights, if one part fails the whole string goes dark. Cranwell's proposal, moreover, would facilitate an evasion of responsibility. If this more comprehensive bond package is the key to economic recovery, as he suggests, then the legislature ought not risk it on the gamble that, just maybe, voters will approve a tax increase.
The idea of leaving it up to the public may be pleasing to some cowardly lawmakers, and to GOP legislators who cynically and foolishly pledged not to vote for a tax increase. But if raising taxes is required to help retire needed bonds, such is the legislators' job and duty.
Besides, the sales tax isn't the appropriate vehicle for paying off debt. Cranwell is right to propose a half-cent increase. But the extra revenue should be earmarked for schools. On top of that, the half-penny portion of the sales tax now dedicated for transportation should be brought back into the general fund and added to the education money. This is the responsible way to restore support for public schools and begin addressing funding disparities.
A bond-issue compromise may be in the offing - one that might preserve the popular transportation projects in the Cranwell bill by substituting a gasoline-tax increase for the sales-tax increase. That sounds fine - provided, again, that lawmakers show the fortitude to raise the tax themselves. It makes sense to use bond financing to build roads and mass-transit facilities, and to use a gas-tax increase to help service the debt.
In any case, lawmakers ought to combine the best of both bills. (Cranwell's, for instance, would put the question to voters on July 14. That's better than the Andrews/Wilder plan for a November referendum. If capital projects can help the economy, why wait more than six months to get on with them?)
Our good leaders should assemble the best parts, box them, tie with the ribbon of bipartisan legislative support - and just watch how fast voters will go for the package.
Keywords:
GENERAL ASSEMBLY