
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, December 26, 1994                   TAG: 9412270064
SECTION: EDITORIAL                    PAGE: A10   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

PUTNEY PUSHES PAY-AS-YOU-GO

IN HIS 33 years in the General Assembly, Del. Lacey Putney of Bedford has seldom voted in favor of tax increases, much less championed them. So when this legislator, an independent and conservative, proposes a half-cent increase in the state's 41/2-cent sales tax - at a time when tax cuts are the rage - Virginians ought to take notice.

Putney generally supports Republican Gov. George Allen's intentions to end parole and embark on a prison-building spree. As a member of the House Appropriations Committee, Putney has also supported long-term debt financing for state construction projects in the past. But he is concerned that Allen is pushing the IOU envelope too far.

Last week, Allen proposed floating $400 million worth of bonds for prison construction, at the same time as he called for a $400 million reduction in the state 1995-'96 budget and a tax cut of $2 billion over the next five years.

Putney's concern, shared by other veteran lawmakers, is that so much honey-dipping into the future could jeopardize Virginia's golden AAA credit rating, making a mockery of its previous citations as ``best fiscally managed state'' while swelling debt-payment obligations for coming generations of taxpayers. While he says he believes voters want Allen's prison-building initiative, Putney insists they might also prefer it on a pay-as-you-go basis.

To be sure, it's a commentary on the political shift we've undergone that the last time a half-cent increase in the sales tax was prominently proposed by a local legislator (state Sen. Dudley Emick), it was to be earmarked for public schools. Now it would go for prisons.

We do not buy, moreover, the old Byrdlike suspicion of all public debt. Borrowing for capital projects and amortizing costs over the projects' useful lives is certainly not irresponsible. General-obligation bond issues have served Virginia well in the past 25 years - building the state's community-college system, other institutions of higher education, mental-health facilities, parks and existing prisons. Throughout this period, Virginia has maintained its reputation for using debt-financing wisely and conservatively.

Still, the Bedford legislator's reasoning is not off-the-wall. Debt-financing shouldn't become a habit, or the first resort for every new governor's agenda. (The last general-obligation bond issue, for $618 million, was just two years ago, following a 15-year interval between such voter-approved issues. Meanwhile, Virginia's total debt has grown from less than $2 billion in 1980 to more than $8 billion now, and much of that has not been subject to voter approval.)

We think using bonds for prisons makes sense, and would rather see a sales tax increase (combined with exemption for food) go to other items. But Putney's proposal - he says it could be automatically repealed after, say, three years - deserves consideration. It stands in useful contrast to the fiscally questionable tax cutting that Allen is demanding even as he adds to future spending burdens.

If, however, legislators decide Putney's is the way to go, no tomfoolery please about sending it to referendum. Vote the proposal up or down, and let Allen decide which he prefers: building prisons or cutting taxes.

by CNB