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Herald endorsement / Cutting state debt limit

Vote yes on SJR 8221

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As the Yiddish proverb reminds us, "Interest on debts grows without rain." Thankfully for Northwesterners, rain is an ancillary concern. Among states nationally, Washington's debt burden registers in the top 10. As the Washington Policy Center underscores in a September issue paper, the state's debt devours $2 billion of the $31 billion biennial operating budget. That's 6 percent of the state's operating budget that could be feeding critical services. Washington can do better.
One long-term solution is to cut the state's constitutional debt limit from 9 to 8 percent of Washington's average annual revenues over a multi-year span. The math, however nap-inducing, informs the state's future debt service and, by extension, offers an easier-to-forecast capital budget cycle. What's not to love?
Many beleaguered Washingtonians, drained by so many ballot initiatives and referenda, reflexively vote no on inscrutable-sounding measures. Senate Joint Resolution 8221, which will reduce Washington's constitutional debt limit over a 20-year period, is less complicated than it sounds, and it merits voter support.
SJR 8221 flows from the recommendations of the Commission on State Debt chaired by Washington Treasurer Jim McIntire "The current limit costs the state money because we borrow too much when costs are high -- and too little when costs are low," McIntire observes. "SJR 8221 fixes that by lowering the state's constitutional debt limit from 9 percent to 8 percent, and averaging it over six years instead of three. That limits the amount of new debt we can take on during the good years and preserves borrowing capacity in tough times."
Pluses to the measure include adding stability to capital construction projects that benefit recreation, state facilities, and education; lowering the share of the operating budget to pay interest and principal on the debt; tamping down borrowing costs by safeguarding the state's credit rating; and, slowly chipping away at Washington's long-term debt burden.
One takeaway: The state's credit rating, like a wage earner's credit, is a linchpin for future growth. In 1982, that credit rating was imperiled by the Washington Public Power and Supply System ("whoops") default, the largest municipal-bond collapse in U.S. history. And to compromise Washington's credit is to commit an injustice to future generations.
The magic of SJR 8221 is its bipartisan appeal. Lions and lambs, Democrats and Republicans, the state Senate and the state House are tackling the debt-limit question in common cause. The joint resolution sailed through the Senate by a 38-7 vote and passed the House by a 91-7 vote. Now it's up to Washington voters to seal the deal and OK a reduction to the state's constitutional debt limit.
The Herald Editorial Board recommends a yes vote on SJR 8221.

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