Approve lower debt limit
Published 12:01 am Tuesday, April 19, 2011
Cutting education and other services is not the only option state government has to live within its means.
It can also work on reducing the second-fastest growing component of general-fund spending: debt payments.
A thoughtful proposal to gradually reduce the state’s debt burden, SSJR 8215, passed the Senate unanimously and now awaits action in the House Capital Budget Committee, chaired by Rep. Hans Dunshee (D-Snohomish). It would lower the state’s debt limit from 9 percent of general state revenues to 7 percent, getting there incrementally over seven years.
The measure would amend the state Constitution, and therefore requires two-thirds approval by each house of the Legislature, followed by a simple majority of voters.
First, it needs to clear Dunshee’s committee, which means he must schedule it for a vote. He should, despite his own reservations about it.
The measure is prime sponsored by Dunshee’s counterpart in the Senate, Capital Budget Committee Chairman Derek Kilmer (D-Gig Harbor). He says he’s concerned that rising debt payments on various state construction projects — mostly buildings for schools, colleges and universities — is squeezing out other spending priorities.
Indeed, state Treasurer Jim McIntire, another Democrat who supports the proposal, testified Monday that if a 7 percent debt limit been in effect a decade ago, this year’s Legislature would have an additional $365 million available to fund services that are being cut drastically.
Kilmer’s proposal also aims to get the state off an economic roller coaster in which it has more borrowing capacity when times are good, and less during an economic downturn — when borrowing more makes sense because it creates construction jobs. Currently, the debt limit is based on the previous three years’ general revenues. Kilmer’s plan would base it on an average over 10 years, smoothing out the effects of booms and busts. By having more to borrow during lean years, the state could also take advantage of lower construction costs for more projects.
Dunshee worries the new limit would be too low to adequately address the state’s construction needs, particularly on college and university campuses. Kilmer counters that while less would be spent on projects overall, more would be available in the operating budget to spend on learning inside existing classrooms.
In other words, it’s about achieving a better balance between borrowing for the future and having money available for the needs of today.
In the end, a statewide debate will take place this fall, and the voters will decide. First, the measure must pass the House. We urge Dunshee to give it that chance.
