My favorite cliff hanger scene is in a film called the Italian Job, in which the hero (played by Michael Caine) is left at the end, hanging, quite literally, over a cliff in the Alps. Following a bill through the legislative process can often feel much like watching one of these thrillers. Take Washington State Representative Hans Dunshee’s bill that would increase the state’s debt limit to improve energy efficiency in public schools. In spite of passing the House of Representatives the bill seemed dead after it failed to get out of the Senate during the regular session. But now the bill is back, as Publicola reports.
The opposition continues to raise fears that the bill’s passage would require the state to raise its debt limit, and what that might mean for the state’s credit rating. Opponents argue the legislation could lower Washington’s credit score. It’s true that agencies frown on states taking on lots of debt when they aren’t collecting enough revenue, which is a special problem during an economic downturn. A bad credit rating means higher interest rates.
However, in our analysis of the bill we found that its impact on Washington’s bond rating would be comparatively small—tiny even—compared to the large outlays planned for highway projects. The legislature is considering billions of dollars worth of these costly road projects that are prone to cost overruns (and that contribute to auto dependence and to the state’s carbon emissions). By rights, the legislature should be more worried about those multibillion dollar roads projects than the relatively small $860 million increase in debt created by Dunshee’s bill.
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So the arguments against the bill are that it:
- might have a negative effect on the state’s credit rating
- increases general fund spending for bond pay back
The arguments in favor of the bill are that it will:
- create as many as 38,000 new jobs over the next ten years
- save $190 million for local school districts in reduced energy costs
- only fund retrofit projects that use the principles of performance contracting
- increase the life span of existing school buildings by as many as 15 years
- save as much as $610 million in new school construction costs
- save as much as $86 million in debt service for new schools
- have a limited impact on the states overall debt load
We don’t know how the cliffhanger in the Italian Job ends, although some people have spent a lot of time speculating. Advocates for energy efficiency and schools hope that the legislature will balance out the arguments against the bill with the many weighing in its favor.