Favorite

An expensive free lunch 

All government free lunches are equal. You pay for them later in spades. So it will be with the giant bond-refinancing program announced ceremoniously last week by Gov. Huckabee. He will call a special election on Dec. 13 to empower the state to borrow $250 million to pay off old college construction bonds, issue new ones and give the colleges and universities $150 million for new construction and equipment. At the same election, voters would give the state Highway Commission power to incur long-term debt forever, as long as the obligations never exceed $575 million. Whenever the bond daddies and lawyers deemed it to be a fine moment, the commissioners could issue more bonds without going back to the voters. It would amount to a permanent line of credit with the bond dealers and investors. For the taxpayers, all this will be totally painless, the governor and a phalanx of lobbying interests assured everyone. “I can’t imagine any organized opposition,” Huckabee said. “I frankly can’t imagine any opposition, period. It’s taking money we’re already spending. It’s not asking taxpayers to make any more investments. It’s not asking them to cough up any more money.” It actually is hard to imagine much organized opposition, or at least any powerful opposition, since a good deal of the political power in Arkansas was smiling behind Huckabee as he spoke. The bond programs bring along for the ride the transportation industry, much of the financial industry, contractors and suppliers, big bond lawyers and all the public colleges and universities. Though she is powerless except for her vote, the average taxpayer has grounds to be at least skeptical of both propositions. The state owes it to people to divulge all the figures, including what happens if the voters were to reject the proposals. Here is the answer in brief: Highways would continue to be improved at a rapid pace, not far behind the pace of construction that would occur if more highway bonds were issued, and the state would continue to appropriate large sums nearly every two years for needed capital improvements at the colleges and universities. The state’s underfunded public schools and health care for children and the poor would be fiscally safer. Look, college construction is nearly always a good thing and so are better highways, but that is not the question voters need to ask themselves. If you are borrowing large sums of money and legally binding a significant part of the state treasury every year to paying the principal and millions of dollars in interest to bond holders, something else is not going to get the money. In the case of the college savings bonds, those who will be robbed are primarily children in the public schools. In the case of the Interstate bonds, the losers will be the rest of the state’s primary and secondary highways, which will get a big infusion of money if the bond vote fails. Potentially, the schools could be affected by the Interstate debt, too, because the law specifies that if a special 4-cents-a-gallon diesel tax and Arkansas’s share of federal Interstate maintenance money ever fall short of what the bondholders need — a real possibility in looming energy and federal debt crises — the money will be taken straight out of the general fund, which pays for public education. The law, written by the highway people, says a shortage in debt-servicing money must not be taken from the highway fund but from revenues that support the schools. That little sentence, inserted repeatedly in the highway law, is never mentioned. But here is the big catch to the college bond refinancing: When the state goes into large-scale debt, it is saying that the beneficiary is the state’s highest priority, its greatest need. It is not the state’s public schools, ranked universally near the bottom in the industrialized world, or their wretched buildings, so graphically described in the court testimony and in the legislature’s own 2002 survey of schools in every county. Rather, it is the condition of university campuses. In the past 10 years, more money by far has been spent on buildings, equipment and campus improvements at the universities and the two-year colleges than on all the public schools in Arkansas combined. No one has condemned the physical conditions of university campuses, except perhaps the University of Arkansas at Pine Bluff, the state’s predominantly black institution. The legislature could have appropriated $300 million for college buildings the next two years without borrowing a dime, but it chose pet projects instead and left another couple hundred million dollars on the table. Huckabee and the director of higher education said college enrollment had risen by 33 percent since the college bonds were first authorized, but most of that growth has been in two-year colleges, which would get very little of the bond proceeds. A bond program for public school construction, where the needs are measured in the billions, would have made perfect sense. Instead, the legislature and the governor were content to earmark a little more than $100 million. There have been recent two-year periods when the University of Arkansas at Fayetteville alone spent that much on buildings and equipment. Huckabee implied that nothing else would be disturbed by extending two bonded debts much further into the future. But the extended debt would codify indefinitely the theft from public education. People should find a way to ask questions about these big debts because the popular prints will not.
Favorite

From the ArkTimes store

Comments

Subscribe to this thread:

Add a comment

More by Max Brantley

More by Ernest Dumas

  • Trusting

    It is a Fourth of July ritual to appraise where we are in meeting the Declaration of Independence's promise to institute a government that would, unlike King George, secure human rights equally for everyone who sets foot on American soil.
    • Jul 6, 2017
  • Obamascare

    Republicans at long last may be about to see their most fervent wishes and wildest predictions materialize — millions of people losing their medical and hospital coverage, unaffordable insurance, lost jobs, a Medicare financial crisis, mushrooming federal budget deficits and fiscal crises across state governments.
    • Jun 22, 2017
  • Ethics upended

    Every week, Donald Trump finds another way to upend conventional ethics in government and politics. Here's one that has been in the making since the campaign but is reaching maturity in the Russian investigation: He is turning the heroes of government scandals into the villains.
    • Jun 15, 2017
  • More »

Readers also liked…

  • AEC dumps ALEC

    No matter which side of the battle over global warming you're on, that was blockbuster news last week. No, not the signing of the climate-change treaty that commits all of Earth's 195 nations to lowering their greenhouse-gas emissions and slowing the heating of the planet, but American Electric Power's announcement that it would no longer underwrite efforts to block renewable energy or federal smokestack controls in the United States.
    • Dec 17, 2015
  • No tax help for Trump

    The big conundrum is supposed to be why Donald Trump does so well among white working-class people, particularly men, who do not have a college education.
    • Aug 11, 2016
  • Dollars and degrees

    Governor Hutchinson says a high graduation rate (ours is about the lowest) and a larger quotient of college graduates in the population are critical to economic development. Every few months there is another, but old, key to unlocking growth.
    • Aug 25, 2016

Most Shared

  • So much for a school settlement in Pulaski County

    The Arkansas Democrat-Gazette's Cynthia Howell got the scoop on what appears to be coming upheaval in the Pulaski County School District along with the likely end of any chance of a speedy resolution of school desegregation issues in Pulaski County.
  • Riverfest calls it quits

    The board of directors of Riverfest, Arkansas's largest and longest running music festival, announced today that the festival will no longer be held. Riverfest celebrated its 40th anniversary in June. A press release blamed competition from other festivals and the rising cost of performers fees for the decision.
  • Football for UA Little Rock

    Andrew Rogerson, the new chancellor at UA Little Rock, has decided to study the cost of starting a major college football team on campus (plus a marching band). Technically, it would be a revival of football, dropped more than 60 years ago when the school was a junior college.
  • Turn to baseball

    When the world threatens to get you down, there is always baseball — an absorbing refuge, an alternate reality entirely unto itself.

Latest in Ernest Dumas

  • The ACA can be fixed

    Majority Leader Mitch McConnell threatened his 51 disciples in the Senate and his party with the gravest injury imaginable.
    • Jul 13, 2017
  • Trusting

    It is a Fourth of July ritual to appraise where we are in meeting the Declaration of Independence's promise to institute a government that would, unlike King George, secure human rights equally for everyone who sets foot on American soil.
    • Jul 6, 2017
  • Obamascare

    Republicans at long last may be about to see their most fervent wishes and wildest predictions materialize — millions of people losing their medical and hospital coverage, unaffordable insurance, lost jobs, a Medicare financial crisis, mushrooming federal budget deficits and fiscal crises across state governments.
    • Jun 22, 2017
  • More »

Event Calendar

« »

July

S M T W T F S
  1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31  

Most Viewed

  • Another Jesus

    If you follow the logic of Jason Rapert and his supporters, God is very pleased so many have donated money to rebuild a giant stone slab with some rules on it. A few minutes on Rapert's Facebook page (if he hasn't blocked you yet) also shows his supporters believe that Jesus wants us to lock up more people in prison, close our borders to those in need and let poor Americans fend for themselves for food and health care.
  • Pay attention

    If anyone thinks that a crisis with the Power Ultra Lounge shooting, then he hasn't been paying attention to Little Rock.
  • Turn to baseball

    When the world threatens to get you down, there is always baseball — an absorbing refuge, an alternate reality entirely unto itself.

Most Recent Comments

  • Re: Turn to baseball

    • leave the rules the way they are. teach players how to hit, don't legislate no…

    • on July 20, 2017
  • Re: Pay attention

    • The beautiful new 12th St. Precinct is full of empty rooms: Why not create a…

    • on July 20, 2017
  • Re: Another Jesus

    • Religious charlatans have been around for centuries. They prey on the weak, sick, poorly educated…

    • on July 20, 2017
 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation