The Idaho legislature will soon be considering HJR 005 which looks pretty tame at first glance, but it is designed to deny citizens the right to approve long term debt at airports and allow airports to go into the real estate speculation and rental business. Here is the GUARDIAN’s take on the bill.
The net effect of this amendment is to deny CONSTITUTIONAL RIGHTS to citizens. Currently citizens have a right to approve profound long-term debt projects at airports. Without voter assent there will be liens on public property owned by all the citizens of a city.
Here is how it works. When citizens go to the polls and approve a long term debt, they offer the FULL FAITH AND CREDIT of the city. When an entity like an airport enters into debt with future revenues as the sole revenue source to pay the bills, it places the public building or land in jeopardy because public assets are used as collateral for the bonds. Typically, these unsecured bonds come at a higher interest rate than those backed by the full faith and credit of the city–backing obtained only through assent of the voters.
Despite what one of the “trusted” rating agencies may say, it is also a terribly risky investment to purchase bonds when the only safeguard is collateral in the form of a fractional interest in an airport structure which you could never foreclose upon.
As written it appears airports would be able to go into the real estate speculation business–purchasing land, building commercial structures leasing them, AND disposing of them IN DIRECT COMPETITION WITH THE PRIVATE SECTOR. In short, cities will be able to “launder” just about any project through airports or urban renewal agencies without voter approval.
One must also remember that any building owned by the government is EXEMPT from taxes. While a city may charge rent for their airport buildings or land; schools, counties, and other taxing units are deprived of revenue from those structures which are owned by city government.
These amendments are nothing more than get-rich-quick schemes and are not good for the citizens–regardless of the revenue source. They are no doubt encouraged and appreciated by the lending institutions which will benefit from the interest on the unsecured bonds.
Link to HJR 005 Warning, it is slow to load, but eventually comes around.
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