Our state constitution and laws are embedded with provisions that have one simple purpose: to keep politicians and their cronies from looting the public treasury and leaving taxpayers with debt.
That’s why the Legislature can include bonds in the state budget for capital projects, but the level of that bonded debt cannot exceed 10 percent of annual tax revenues.
When local governments issue bonds to build new facilities, they are required to get voter approval in a bond referendum.
These are wise limitations, and we have them because politicians have to raise money from contributors to get elected to public office. These contributors are frequently builders, developers and contractors who expect to see a return on that investment in the form of public construction projects.
Because of the economic downturn, state and local governments have cut back on infrastructure projects in recent years.
This has been a troubling trend for construction and engineering firms that depended on government work as a source of business. That particular revenue stream has just about run dry.
What can these interest groups do to get around all these troublesome limitations on bond debt and public spending?
One way is to authorize state and local governments to form private-public partnerships, known by the abbreviation P3, where a private firm assumes part of the financial risk of a project in return for getting access to public funds.
These P3 partnerships were authorized several years ago to build toll roads. There is now a bill pending in the Legislature to allow the same sort of public-private relationship for “vertical construction” projects such as government buildings.
At a legislative hearing on the public-private bill, known as SB 255, the hearing room was packed with lawyers and lobbyists who represented engineering, construction and development firms.
“It’s all been very positive,” Sen. Hunter Hill (R-Smyrna) remarked near the end of the hearing. “Is anyone opposed?”
Not surprisingly, all the audience members thought the bill was a great idea. The lobbyists at the hearing tended to use the same corporate buzzwords and jargon in their sales pitches. By allowing these partnerships with outside companies, they said, legislators would be able to “unleash the creativity and innovations of the private market” to get these government construction projects underway.
Think about that for a moment. We’re talking about generic government buildings. How many “creative” and “innovative” ways are there to dig a foundation, frame up a building, and put a roof on it? This is basic construction work that you would want to achieve in the most economical way possible for the taxpayers.
Another phrase tossed around by several of the lobbyists was that these public-private proposals were “just another tool in our toolbox.” Time and again they came back to the analogy of tools and toolboxes.
Let’s remember that “tool” spelled backwards is “loot.” I fear that if this particular bill should pass – and there are some influential people with money who will try to get it passed – then you could see some large-scale looting of the public treasury.
Governments obviously have a need, on occasion, to build new roads, schools, courthouses and other facilities that provide services to their constituents.
There’s a simple way to get this accomplished. If you need a new building, then allocate tax funds or float a bond issue to pay for it. If the voters approve the bond issue, that’s fine.
One final piece of advice if the General Assembly should approve that public-private bill: watch out for your wallets.
(Tom Crawford is editor of The Georgia Report, an Internet news service. He can be reached at firstname.lastname@example.org.)