FOR IMMEDIATE RELEASE
July 4, 2008
Contact:
David Atkinson
(717) 787-6535
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Senator Gib Armstrong
 The Necessity of State Borrowing

Across Pennsylvania, thousands of projects need to be done.  Some for economic reasons.  Some for environmental reasons.  Some to meet community development hopes.  Others to address public safety.

With the national economy slumping, and with state revenues tightening, there is simply no way to carry out these responsibilities on a pay-as-we-go basis.

We have a borrowing package that contains four major pieces: bridges; water, sewer, and dams; community redevelopment; and energy development.  The money is aimed at core responsibilities of state government.  Given the fiscally conservative approach to recent budgets, debt is not taken on casually.  There are sound reasons for borrowing now.

No one disputes that Pennsylvania has a boatload of bridges, or that many of them are in bad shape.  Funny thing about bridges – they refuse to get better if you neglect them.  Repairs on hundreds of bridges are riding on the borrowing we are set to authorize.

The sewer upgrades must happen.  To address orders to deal with combined system overflows.  To comply with Chesapeake Bay cleanup mandates.  There is no getting around the work.  Without state money to defray the cost, a smaller group of ratepayers will get socked with the full load.

Deferring dam projects means risking disaster.  Deferring industrial projects on brownfields means kissing opportunity and jobs goodbye.  Deferring on energy projects means that new products, better fuel efficiency, and consumer cost savings will take place elsewhere.

Whatever does not get done now, will cost much more later.  Interest costs will be going up.  Construction material costs are climbing at rates far above any cost-of-living measure.  So it is not going to be cheaper to do any of these things next year or the year after that.

In doing the balance sheet, we must count the community costs imposed by inaction.  When bridges are shut down, or low load limits are posted, the detours cost motorists and shippers more money.  And it is worse in times of rising fuel prices.  So going cold turkey on debt is not cost-free.

The amount to be borrowed is reasonable and responsible.  Pennsylvania's debt service is nowhere near the crippling levels of the 1970s.  And on the plus side, the construction activity financed, the materials and supplies bought, and the wages paid, will soften the economic slump starting to hit our state hard.