Last year, with the lessons of the recession fresh in my mind, I sponsored a bill that reduced our state bonding authority for roads by $130 million dollars. At that time, the state had $2.2 billion in outstanding bonds that had been issued for I-15 reconstruction and other major projects. Due to the drop in construction costs, innovative bridge building techniques developed by Utah Department of Transportation (UDOT), and other cost saving mechanisms the state had been able to save millions on the projected costs of projects currently in the pipeline.
Though roads and the ability to move goods and people are critical to the state’s economic well being, I had become concerned that we were bonding (borrowing) for too much money. Like many of you, the recession provided me with important financial lessons about prudent spending and borrowing. Legislators that oversaw budget deep cuts during the recession will likely never forget the pain of having to make difficult calls on as to which programs, services and sometimes state employees to cut. Like the generation that learned lessons on thrift from the Great Depression, I want to ensure we apply the lessons of the recession on an on-going basis. We never want to be in a position where we have leveraged our financial security.
As a state, we have a certain amount of credit based on our assets and credit worthiness. Just as in personal finance, it is never a good idea to exhaust one’s credit limit, the same is equally true for the state and its credit limit.
When my bill passed last year lowering the bonding authority, we thought it might be a bit tough to learn to live within the new limit of $274 million dollars. However UDOT found it was able to continue to complete projects at the new level through continued innovative engineering and budgeting. This year I am again proposing that we self-impose a credit limit and reduce that bonding authority by another $100 million. I truly believe that the best guarantee against future economic crisis is to ensure our budgets and borrowing are sustainable.
UDOT has done a fantastic job of pioneering new engineering techniques, which have allowed many recent projects to be finished ahead of schedule and under budget. I believe we can cash flow the savings from the I-15 CORE and other projects to new projects on the “to-do list” rather than issue additional bonds. I also believe take we need to take politics out of the road building and funding process. In the past, powerful politicians have been able to direct funding to projects in their districts ahead of other needed projects higher on the “to do list.” I want to give more authority to the Transportation Commission to evaluate and schedule road projects based on objective criteria so we build the right project at the right time. There is a science to the road construction and infrastructure maintenance schedule that allows for peak efficiencies in use and repair. Politicians monkeying with the order and priority of projects reduce the system efficiencies and end up costing the taxpayers more money in the end.
Rather than have outside financial entities or economic circumstances dictate our credit and financial security, I believe we can look at our spending, budgets, and future needs and self-regulate a credit limit that doesn’t overburden us. Combining this efficient use of resources and credit with a more objective and balanced approach to approving and planning projects is a win-win for everyone using our roads today and for the generations that will inherit the infrastructure we build.
Brad Dee is the House Majority Leader. He represents House District 11, which covers portions of Davis and Weber counties.