Fellow blog readers and Baconauts. Please help me with this.
I was just getting over Barack Obama’s surrender to the conservatives on tax cuts when I opened this morning’s newspaper and learned that Republican Gov. Bob McDonnell is really a Keynesian and is willing to blow out the state’s troubled debt obligations to get roads for which two of his previous fund-raising schemes have failed.
And to think that just two Sunday’s ago, the Right Rev. James A. Bacon was delivering another one of his stern sermons that Virginia will pay an estimated $594 million in 2012 to service its $9 billion tax-supported debt. According to our deficit watchdog, Virginians are paying more to service debt than ever before and the state “cannot afford this nonsense any more.”
Here’s the new nonsense: McDonnell will ask the state to spend $400 million immediately on roads and bridges while borrowing another $2.9 billion over the next three years for more transportation needs. Of this, some $150 million will come from last year’s budget surplus and $250 million that an audit revealed the Virginia Department of Transportation has already had.
McDonnell’s justification and that of his transportation chief Sean Connaughton is that construction costs and bond financing is cheaper than it has been in decades and there are bargains to be had.
Actually, I tend to side with them on this. Virginia’s roads needs are significant if the state is to continue to position itself for growth not just tomorrow but over the coming years and decades.
Building roads now will mean more jobs now, not some years down the pike. You can’t completely toss John Maynard Keynes out with the baby’s bathwater, anyway. He does make sense.
The proposals would create a state infrastructure bank with $400 in surplus and other funds. That’s not a bad idea since many countries around the world have created similar institutions to fund transportation needs. Changes in state bond laws would also be needed.
While I like the idea of stopping moaning about deficits and debts and getting on with projects that create jobs and could enhance the state’s chances for prosperity down the road, there is some concern about McDonnell’s topsey- turvey policy-making. I am not all that concerned about the “New Fru” tut-tutters like the Right Rev. Bacon. If you listen to them, nothing would ever get done besides a bunch of hand wringing.
But McDonnell’s two previous plans to boost transportation funding — privatizing ABC stores and offshore oil drilling — are kaput. What’s happened is that Connaughton, one of the few serious pros in McDonnell’s administration, has convinced Bob to get off the dime. These inconsistencies are worrying and still show that McDonnell’s is a second-stringer when it comes to governing.
In any event, I see the news as welcome.
Peter Galuszka
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