Will state debt bring paralyzing protests our way?

Washington's politicians in both parties seem to think that any debt is good debt if it builds highways. They ought to be thinking about using state resources to create economically and environmentally sustainable communities.

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Demolition of an Alaskan Way Viaduct off-ramp.

Washington's politicians in both parties seem to think that any debt is good debt if it builds highways. They ought to be thinking about using state resources to create economically and environmentally sustainable communities.

The protests are spreading. Cairo, Tehran, Bahrain, Madison. Madison?

Wisconsin has suddenly become a hot bed of anti-government protest and the latest front opened in the “war on debt,” the rhetorical and political effort—led in Wisconsin by Republican Governor Scott Walker—to reign in government spending and borrowing.  Another Republican governor, Mitch Daniels of Indianan, has taken the hyperbole to new levels calling government debt the “new red menace.” But while politicians of both parties bash unions and unions bash back, nobody in our region seems to be focusing on one big source of unsustainable debt: borrowing for highways.

In Washington, according to a recent story in the Seattle Times, “the total amount of money owed for construction projects, not including transportation, has jumped 66 percent since 2000 to more than $10 billion.” Paying that debt off will cost the state about $2 billion or about 6 percent of general fund spending over the next two years. But what about borrowing for highways?

Big, costly highway projects like the deep bore tunnel will cost the state more than $7 billion dollars; much of that — $2.1 billion — will be borrowed money. That’s in addition to other debt.

The state already has over $1 billion in highway debt and is preparing to take on more, borrowing for massive spending on the tunnel and 520. The Washington State Department of Transportation’s own estimates show that in coming years just about all money raised from taxes for transportation will be paying off debt.

Putting more money into highways is the equivalent of taking a mortgage worth more than the resale value of the house—its highway debt that is putting the state underwater. Roads are non-performing assets; they don’t pay for themselves but actually create an ongoing maintenance burden. And they support what the state has committed to reduce, miles traveled in cars.

But where are local debt fighters looking? Linda Evans Parlette, Senate Republican caucus chair, blames unions representing state employees for the debt. In recent comments on the state debt, Parlette complains that state workers pay only 12 percent of their health care while taxpayers foot the rest of the bill adding to the state’s financial problem. “This is way out of line of line,” says Parlette. And Washington’s Democratic Gov. Christine Gregoire announced efforts late last year to put a dent in employee health and pension costs, promising to reduce them by hundreds of millions over the next few years.

Union leaders, of course, have a different point of view. Dave Freiboth, Executive Secretary of the King County Labor Council told a recent Crosscut writers lunch that seeking higher wages for workers was a way of expanding and securing membership in the middle class.

Freiboth suggests the problem is that Washington's tax rates are the lowest tax they have been since the 1950s. And it is true that voters just decisively shot down the most recent effort at revenue enhancement, Initiative 1053, which would have given Washington it’s first income tax in decades.  “What’s gone on with our tax structure is the problem,” according to Freiboth. “We’ve got to rebuild our tax base which has been decimated.”

But here’s what is interesting: Democrats, Republicans, and labor seem to agree we need more highways and are willing to borrow lots of money for them. Republicans tend to see transportation alternatives like mass transit as social engineering. Both Democrats and Republicans seem beguiled by the economic development potential of more roads. And labor leaders want jobs. Why is it that debt for highways somehow escapes the rhetorical bomb throwing of local politicians?

In the coming ‘war on debt’ you can count me as a soldier on the side of people like Paul Krugman who argue that our elected officials fears of debt are profoundly misplaced. Politicians like Daniels are doing what politicians who have no ideas often do: resort to fear tactics. Now isn’t the time to stop borrowing, rather its time to borrow for investments that will pay for themselves and more — not highways. We might avoid the kind of bitter clash occurring in Wisconsin for the time being. But it may be coming, especially if state government continues to prioritize building highways over sustainable investments in the future.

Jobs can be created by sustainable debt like that proposed by state Rep. Hans Dunshee’s Referendum 52, which would have upgraded schools and saved the state money in the long run. And, if legislation passes to create Tax Increment Financing this year, cities will be able to issue debt for development projects that will focus on walkable, transit friendly neighborhoods that reduce carbon emissions, save energy and create jobs.

Good debt pays for itself. Bad debt creates a quick rush of short-term jobs building things that will end up costing us more money and negative impacts in the future. Borrowing billions for highways might just end up keeping people in their cars for now, but they may eventually be on the streets protesting.


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