Why Bond Issues Suck for Our Kids

Here's some math that arithmetic-challenged Pennsylvanians have never taken the time to calculate: When you see a bond issue referendum on the ballot for a good cause, think first. Voters approved $625 million in bonds for Growing Greener II. Now, I am as big an environmentalist as the Republican Party can claim, but I voted against the borrowing. For those of you who do not understand macroeconomics, state constitutions state that a balanced budget has to be passed by the end of the fiscal year, which is June 30 in PA. However, when we start the 2007-08 fiscal year, we are already $1 billion in debt, which buys no services, no tangible items, no health care, except paying the interest on debt incurred to pay for overages unavailable from tax revenues in budgets long ago past. $1 billion. May not sound like a lot in a $55 billion state and federal budget, $27 billion in state money, but it is. Rendell wants to borrow more - for alternative energy. Again, a good cause, but we have to stop and calculate the premium we are paying for this money. The $625 million Growing Greener II bonds need to be repaid. Investers buy these safe havens with the backing of the state taxpayers guaranteeing them as safe investments that will pay, let's say 6.5 percent return. We're talking $45 million or so a year on the money borrowed. Over the 20 year life of the bond, that's an estimated $325 million, probably more. One estimate I saw was that the $625 million will cost an additional $325 million to repay, a 52 percent premium, but I also saw a higher estimate that the money will cost $974 million to repay...It's like a mortgagee buying a house from the bank for $127,000 and owing the bank over the life of the loan $240,000 over the 30 year if you live there the whole time. So let's call bond issues what they are: taxpayer morgages. We are making our children pay for them. So I voted against growing greener bonds, against Persian Gulf War bonds and will vote against Energy Fund bonds. $850 million in proposed borrowing...will cost maybe $1.5 BILLION to repay, a 55 percent premium assuming $75 million a year (paid for by a new electric bill surcharge, i.e. tax that WE will pay because corporations won't suck it up and make their bottom line less for their corporate investors and stockholders). The tipping fee increase, about a $2.75 per ton, will come back to us in our garbage bills. That pays for the interest on the GGII bonds, not existing tax dollars, but future dollars. Let's pay as we go, not make our children pay for our past borrowing. We don't ask them to pay the mortgage on the house back to the bank, why whould they bee the morgagees for out current state fiscal decisions. Vote no on the bond issue. Don't let government convince you to borrow money because of packaging, branding and spin doctoring...an alturistic spin for living beyond your means as a state, branding like Growing Greener or Energy Independence Fund = higher taxes for you and your kids.

The Forgotten Political Art of Mea Culpa

So the press release said it was Mother Nature, but Ed Rendell admitted that all of the people that did or did not respond as well as they should have were probably state employees. We're talking about the Valentine's Day snow storm that shut down large sections of Interstate 78 and other state highways. Rendell's spin meister, the fashion-challenged Kate Phillips, did invoke the Hollywood 'literary allusion" of Perfect Storm...Pennsylvania style, snow, coated with an inch or more of ice and cold rain, packed down with more snow to form a PennDOT-stymying inches thick ice sheet. This perfect storm caused trucks to jack-knife, cars to get stuck behind them, and motorists stupid enough to believe that their tax dollars could actually be used wisely by their government to be stuck in traffic for several meals and overnight. Perhaps we should have, as one TV news channel suggested, had PennDOT plowed the snow before it fell. Rendell did a mea culpa from Philadelphia after one of his state police handlers in the 'governor's residence' in Harrisburg told him hundreds were stranded, a fact that failed to come up during a conference call that occurred on Wednesday...none of his high level political contributors/nepotistic/cronyistic appointments, I mean cabinet members seemed to have known this. Looks like farmer Allen Biehler, transportation chief, may have to fall on his sword as he looked pretty unprofessional in a Channel 69 interview where he did not answer any of the questions, which were, why was this emergency response a Katrina-esque cluster fuck? It's not like the forecasters got it wrong. They told us ahead of time exactly what was going to happen. We seemed to have no plan as to how to deal with the perfect storm that the forecasters actually got right in their warnings. So, naturally the blame game and hearings will start. Rendell however, did do the right thing in accepting blame and apologizing. It was what President Bush should have done about two years ago regarding Iraq...and we might be billions of dollars richer and many people may not be dead as a result of an expensive war. So, motorists were stranded by weather, but no one died, snow mobilers skiied in snacks and National Guard eventually got supplies, gas, sandwhiches and water to generally understanding motorists. Let's hope no lawsuits get filed for loss of consort on Valentine's Day. Class actions suit to follow the James Leee Witt full employment act and the Fajt Commission reports, which will follow the studies of the various policy committees holding hearings, all toward what end, distracting us from the fact that the governor just asked for an extra $3 billion in taxes and borrowing? Maybe the funds for the Lehigh Valley transportation cleanup were diverted to Philly or mass transit from general fund transit money, or maybe Georgie Boy and his new federalism spent federal funds fighting wars and made the states find money to pay for welfare and No Child Left Behind, but the fact that the storm wasn't responded to in a fascist way, i.e. the trains did NOT keep running on time like Il Duce could do, means that yes, government did fail its taxpayers. The very least taxpaying Pennsylvanians should expect is that their investment will provide them services. Which leads me to my next rant...