$861 million bond measure not fiscally responsible, says Smith

 

Vote against bond bill was effort to save Washington taxpayers $63 million each year, $1.5 billion long-term

In a year that offers legislators and taxpayers a host of challenges, and when current tax revenue cannot pay for services promised to citizens, Rep. Norma Smith, R-Clinton, was disappointed a bill to increase the state’s debt load by $861 million passed the House.

“This is not a jobs bill. This is a bill that would increase our debt obligation in the operating budget by more than $60 million annually,” Smith said. “It would add to our deficit and put education and other essential services at greater risk of additional cuts.”

House Bill 2561 would authorize the state to issue a 25-year, $861 million bond to retrofit public buildings for energy efficiency. With interest expenses, the total cost of this expanded debt proposal would be $1.5 billion over the life of the bond. The bond offering would require a public vote this November to go into effect.

Because adding the new bonding would cause the state to exceed its constitutional debt limit of 9 percent the Legislature is allowed to authorize, a public vote to issue the additional debt is required, Smith explained.

“This simply is not prudent,” said Smith. “We cannot borrow our way into prosperity any more than we can spend ourselves into it. Taxpayers would be on the hook for the payments on the bonds, which will cost them $63 million each year. How can we make such a massive financial commitment with other people’s money when we cannot even fund the current level of government services the majority party has promised? I support common-sense proposals that create sustained job growth in the private sector, but this bill does not do that. Future generations would be forced to pay for the decisions made today. That is not fair or responsible.”

Any financial savings from the energy efficiency measures the bill authorizes will stay with the school district. This means taxpayers would be paying the bonds directly through tax collections rather than using the savings from the upgrades to pay off the bonds, Smith explained.

Smith supports the House Republicans’ “Made in Washington” pro-jobs agenda, which focuses on government reforms and efficiencies to help retain and create private-sector jobs statewide.

“More spending is not the answer – more efficiency, smarter government and real reforms to workers’ compensation and unemployment insurance payroll taxes are the solutions that will put people back to work,” Smith said. “By creating a healthy employer environment, we will grow state revenue by putting some of the 334,000 people out of work back on the job, paying taxes and contributing to community growth and vitality.”

The annual debt service on the bonds would cost taxpayers $63 million for 25 years at 5 percent interest. Sixty-three million dollars is just shy of the governor’s suggested budget cut to school levy equalization. It is the same amount the governor’s budget would cut from all-day kindergarten, almost as much as the state pays for annual parks maintenance, and is equal to the amount the state would spend on family and child health and safety through the state Department of Health over two years.

The bill passed the House 57-41. It will now head to the Senate for consideration.

###

For more information, contact Bobbi Cussins, Public Information Officer: (360) 786-7252

###

Washington State House Republican Communications
houserepublicans.wa.gov