Passing Bond Issues Without a Payoff Plan -- Business as Usual?
We've learned to avoid taking financial responsibility whenever we can, but time is running out for this shortsighted fiscal attitude
Former Gov. Brendan Byrne was New Jersey's chief executive from 1974 to 1982. Now 90 years old, he has lately been especially outspoken about the state's borrowing habits and fiscal indebtedness.
We issued an open invitation to our former governors to write whatever they wanted, at whatever length, and Byrne -- rarely short of words in person -- made his position clear in a few powerful paragraphs
A year or two ago I was asked to co-chair the drive to pass a bond issue in New Jersey to improve college campuses, a much needed project. Education is our most important commitment to our youth. I responded by saying I would be happy, just tell me how we are going to pay off the bonds. No hurry, but we do need a plan. I never heard from anyone again and the bond issue passed easily without me.
In my opinion, the bond issue would have passed even with a payoff plan. We needed it. Trouble is, we have become hysterical about taking financial responsibility we can avoid. And we are reaching limits of borrowing, rolling over rather than paying off.
When I first got in the government we either had sinking funds in which we accumulated the money in advance or we had a payoff plan, usually 20 years, built into the issue. No longer. And you don’t want to hear about it until you have to and then it may be to late. We don’t have a plan. Don’t say I didn’t warn you.