The establishment media in this state and the heads of both establishment political parties have again joined forces in a stirring display of bipartisanship (which is a very different thing than nonpartisanship) in order that government of the bankers, by the bankers and for the bankers shall not perish from Arkansas’ earth!
I refer to their joint efforts to load another round of debt onto the backs of Arkansas taxpayers - even when we could pay-as-wego. Paying as we go however, leaves little in the way of bond sales commissions for the financial interests of this state. Plus, politicians have so much more fun spending money and giving away stuff when someone else “down the road” has to pay for it. Thus Governor Mike Beebe has called for a Nov. 8 special election to ask the voters to take on more debt.
He is selling it as an “extension” of existing debt.
But take my word for it, it is not an “extension” of existing debt. It’s new debt.
It’s additional debt. If you maxed out a credit card or line of credit, then made payments for 15 years to pay it off, then just when you paid it off decided to max out the credit card or line of credit again, that’s not an “extension” of your existing debt. It’s additional debt, and that’s a good analogy of what they are trying to talk you into here.
Citizens have had to endure extremely one-sided coverage of the issue of what we want to do about our GARVEE highway bondprogram, and a fuel tax that helped pay for it. The news reports mention that the bond issue passed with an overwhelming majority in 1999. They don’t mention that the increase in diesel and motor fuel taxes, which was also a part of paying for this program, was passed by the Legislature without a vote of the people.
Nor do they mention that a very similar proposal was soundly defeated just a year before by a wide margin.
The difference was that Jim Guy Tucker, who was pushing the program, had lost the confidence of the state’s voters. In 1999, people trusted Mike Huckabee. In the initial goodwill and false belief that he was a fiscal conservative, people trusted him when he said that we should vote for a program that was very similar to the one Tucker was advocating.
In that wave of good feeling toward Huckabee, and with a constant media drumbeat in favor of the debt, the people switched their vote.
GARVEE bonds are issued under a federal program which basically allows even bond fees and interest to be repaid out of a state’s stream of federal highway money. Of course, each dollar spent for fees and interest is one less dollar for road maintenance.
The state’s federal highway dollars were pledged as collateral for the loan, but,should those funds fail to materialize then the state’s taxpayers would be on the hook to repay the bonds.
Additional sources of revenue were also tapped. The state raised taxes on gasoline and diesel fuel. While the increase on gasoline was for only three years, the increased tax on diesel fuel - with money earmarked to repay the bonds was not slated to expire with the bonds.
Now the bonds are starting to be paid off. The purpose for which the tax was levied is ending, but they want to make the tax increase permanent by using it to fund a new round of borrowing. They could repeal the tax increase with a simple vote of the legislature. They could use the money for routine road maintenance on a PAYGO basis. Instead, they want to use it as collateral to borrowmore money. Again, banksters don’t get well when governments operate on a PAYGO basis. They want us to use debt. And our state leaders and media are very obliging.
Another very important point: If the feds don’t come through, Arkansas taxpayers would be on the hook for the debt. In 1999 we were pretty confident that the federal government highway money that we used as primary collateral on this borrowing was going to be there even 10 to 15 years down the road. Is there anyone out there today so insanely stupid as to have the same high degree of confidence that the feds will keep the money flowing? Well, yes there is. The chairmen of both the Democratic and Republican parties seem to be that insanely stupid. Or at least they know where their bread is buttered.
And speaking of hack journalism, how about articles that cite four or five sources that are in favor of the new debt and not one voice opposed to it? How is that for journalistic integrity? I’ve seen it happen repeatedly on this issue, so I thought I would give you the other side for equal time.
In one, Highway Commission chairman Madison Murphy actually mentions one of the true problems without looking at it as the problem. He notes that we went from 350 miles of interstate in 1999 to over 650 miles today. To him, that means we obviously need to borrow a bunch of money to maintain them. To me, it means we have overbuilt interstate highways - which is inevitable when you borrow a bunch of money and your government feels like they have to spend this bonanza in a hurry. Such is bound to happen again if we give them another large pile of borrowed money.
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Editor’s note: Mark Moore is the lead writer for an Internet blog on matters pertaining to Arkansas culture and government, Arkansas Watch, and on Tuesday nights is the host of an Internet-based radio program, Patriots on Watch. He can be reached through The Times at [email protected].
Opinion, Pages 4 on 09/07/2011