Keep it Rolling
Officials must address unresolved issues
State officials were justified in being delighted with the results of a bond sale that netted nearly $750 million for highways and bridges in West Virginia. But can we keep the ball rolling? Not without addressing serious, unresolved issues.
In October 2017, Mountain State voters approved sale of $1.6 billion in bonds to fund the “Roads to Prosperity” campaign. The first $800 million in bonds were sold last year, at a 3.575% interest rate.
This week’s sales, netting $746.5 million, were at 2.99% interest. That will save taxpayers millions of dollars.
“That was just over the top good,” state Revenue Secretary Dave Hardy said of the interest rate. Indeed it was.
It was a reflection of the confidence investors and bond rating companies have in West Virginia’s economy and, more particularly, state government. Just a few years ago, when midyear spending cutbacks were common to keep the budget in balance, there was much less confidence. Since then, the economy and, as a result, state revenues have picked up.
So has state spending, however. And now, we are back to worrying about balancing the budget.
For investors and bond rating agencies to keep having confidence in West Virginia, Gov. Jim Justice and legislators will have to deal with the problem — and not in the easy way, by drawing down the “rainy day” emergency funds. Reining in spending to match revenue is a necessity, otherwise, the next time we borrow money, the interest rate will be higher.
Unfortunately, there will be a next time and it will be to repair highways and bridges, unless state officials address the elephant in the room. It is the fact that our highways budget is hundreds of millions of dollars a year short of what is needed to keep roads and bridges in good condition.
Now, as we enjoy the low interest rates in this round of road bonds, is the time to tackle that longstanding challenge.