Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, October 6, 1994 TAG: 9410110087
SECTION: EDITORIAL PAGE: A-13 EDITION: METRO
SOURCE: RAY L. GARLAND
DATELINE: LENGTH: Long
Either we have a crisis close at hand or we don't. Certainly, Allen's parole-abolition bill won't be kicking up the numbers for a few years yet. But if the state's prison population is going to increase from 20,000 now to 52,000 in 10 years - as they keep saying - somebody had better get very busy working on more space. While they may be able to build in a year or two the nine work camps for low-risk offenders that the assembly found money for at its special session, normal prison construction takes about four years - longer if local or environmental opposition materializes.
Since Allen's parole board has drastically reduced the rate of release for those already in the system, and local sheriffs are clamoring for relief from overcrowding, it won't take long for a real capacity crisis to appear. No doubt, the governor's opponents would love to see him stewing in that volatile mixture.
If the legislature in January goes along with issuing bonds not requiring voter approval - and that's a big if - the bill would not likely become law until July 1, 1995. It could be passed under an emergency clause, but that would require approval by four-fifths of those members voting, which might be hard to get. But planning can go forward and there's lots of that needed anyway. For the record, there's a bundle of money that hasn't been spent from that $613 million bond issue voters approved almost two years ago!
If Democrats insist on making the prison bonds subject to voter approval, the delay begins to stretch out. Logically, a referendum would coincide with elections for the General Assembly in November of next year.
While I believe that a bond issue for prisons in the range of $300 million would easily pass, I don't know how legislators, especially Democrats, will feel about the question's being on the ballot at the same time they are standing for election. Call it superstition based on Virginia's old hatred of debt, but past lawmakers have been reluctant to see voters faced with a choice of bonds and legislative candidates at the same time.
Democratic leaders such as Del. Richard Cranwell got religion on debt when Allen brought up the subject. But according to Cranwell's own figures, Virginia's total debt increased by more than 200 percent during the 12-year Democratic reign that Allen ended. Nor were Democrats reluctant to use the Public Building Authority as a bond-issuing source for prison construction.
But the bulk of that $9 billion in bonds issued or pending is not even indirectly an obligation of taxpayers. For example, the Virginia Housing Development Authority, which sells tax-exempt bonds to finance mortgages for those qualifying, has more than $3.5 billion on its books. While I have long believed that tax-exempt bonds have been used for too many purposes, I have no reason to believe that any significant portion of VHDA's portfolio is at risk. But if some unimaginable financial panic drove VHDA to the wall, bondholders would not look to taxpayers for relief. That is quite understood.
In fact, bonds approved by voters and thus carrying the state's absolute guarantee represent less than 10 percent of the $9 billion in so-called Virginia debt. That isn't the whole story, of course. While VHDA bonds - and some others - clearly aren't a taxpayer responsibility, there is much for which the taxpayer is morally obligated and which must be treated as a debt of the commonwealth.
The secretary of finance puts the total, tax-supported debt of the state - both issued and pending - at just under $4 billion. What the bond market watches is the share of general-fund revenue which must be set aside for debt service: Anything over 5 percent raises a red flag. The secretary estimates that the cost of servicing the entire $4 billion in tax-supported debt would equal less than 3 percent of our general-fund revenue. We might compare that with the federal government, where debt service is about 15 percent of revenue.
All said, you can't build a case that too much debt is yet a serious problem for Virginia. It's one thing to borrow to cover normal operating costs, as the federal government does regularly, quite another to borrow for capital projects with decades of useful life ahead.
With only minor tinkering, and the wise appropriation of $56 million in front money, legislators approved Allen's bill abolishing parole and increasing time for serious offenders, by a vote of 89-7 in the House and 34-4 in the Senate. If they believe the state's prison population will grow by an average of 3,000 inmates a year over 10 years - to say nothing of local jails - they must soon get very serious about providing space. It's hard to avoid a conclusion that bonded debt must play a sizable role in bringing reality into line with rhetoric.
The governor is said to be not displeased that first-phase financing failed to go through at the special session. He is said to believe in the commitment of Democratic leaders to come back in January and find ways to pay for prisons. He has no problem with that taking the form of general-obligation bonds, which he believes would be easily approved by voters.
But it's hard to see Democrats happy with the prospect of Allen on the hustings as the crime-busting cheerleader at the same time they are trying to hold on to slim majorities in both houses. The better part of wisdom, perhaps, would be to give the governor those bonds that don't require voter approval now, reserving those that do for later. In reality, some of both are likely to be needed before it's over.
Ray L. Garland is a Roanoke Times & World-News columnist.
by CNB