Idaho Senior Senator Mike Crapo is pushing to make it easier for Idaho’s local governments to get deeper in debt by making cash available to banks, but he fails to mention Idaho cities have to ask permission of voters BEFORE going to the banks.
Those loans from local banks have to be repaid through higher local taxes. Idaho’s constitution mandates that those whose pocketbooks will be picked have to give their assent.
Crapo and Senator Jeff Bingaman–a Dem from New Mexico–talk about “permanently extending a provision that helps small and rural municipal governments raise capital to finance local infrastructure projects – including school and road construction.”
Instead of “raising capital,” the new law would only serve to raise taxes to pay for increased debt. As the GUARDIAN sees it, Crapo’s bill would make “easy money” available to banks, but local governments still have to pay off the increased debt and the only way to do that is raise taxes.
There are three proposed constitutional amendments on the November Idaho ballot aimed at abolishing the rights of citizens to vote on such debt for public hospitals, airports, and power facilities.
A Crapo spokesman said the Senior Sen would respect all Idaho laws and not seek to influence the outcome of the proposed constitutional amendments. Check out the list of supporters–all stand to profit at the expense of taxpayers.
Here’s more from the Senior Sen.
Before 2009, banks had incentives to purchase municipal bonds only from municipalities that issue $10 million or less in debt each year – a level that was unchanged since 1986. The American Recovery and Reinvestment Act incorporated a provision pushed by Bingaman and Crapo to raise that limit to $30 million, but that measure expires at the end of this year. The Bingaman-Crapo Municipal Bond Market Support Act of 2010 would make the $30 million level permanent, and index it for inflation.
The increased level has so far enabled municipalities from across the country to place bonds directly at financial institutions, including community banks. When municipal governments work directly with community banks, they achieve considerable savings on interest and transaction costs.
“This provision has helped small communities across New Mexico and the country finance critical infrastructure needs and create jobs. The higher bank-qualified limit is a great success and deserves to be made permanent. We need to ensure that our small municipalities can continue to raise capital, particularly in periods of tight credit,” Bingaman said.
“As our small communities continue to struggle to secure financing for important infrastructure improvement projects, our efforts last year have proven successful in Idaho and throughout the country. I look forward to continuing to work with Senator Bingaman and my colleagues on the Senate Finance Committee to extend these important provisions,” Crapo said.
In 2009, the dollar amount of bank qualified issuances doubled to $32.7 billion, with nearly 6,000 issuances. Among the beneficiaries are New Mexico and Idaho counties, cities, and school districts in all corners of the states.
At least 13 organizations have expressed support for the Municipal Bond Market Support Act of 2010. They are as follows:
The bill has been sent to the Senate Finance Committee; both Bingaman and Crapo are members of that panel.
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May 12, 2010, 6:35 pm
Been in DC too long
May 12, 2010, 9:08 pm
We need an all out effort to ensure the amendments to the State Constitution do not pass. We’ve all seen how government (local to national) is incompetent in managing our money. Keeping voter approval to go into long-term debt forces local government to make the case for the debt sufficient that we are willing to pay more taxes.
May 12, 2010, 10:24 pm
Not sure this is the time or place but just wanted to say thanks for the blog. I don’t always agree with you but I do think you are a much needed local voice and a gadfly in the oitment of business as usual. Thanks for the effort and keep up the good work.
EDITOR NOTE– We can always make room for nice words like yours!
May 13, 2010, 1:10 am
I think that the 2/3 majority requirement is too high and would favor it being made a simple majority, just as in electing officials into office. But these proposed constitutional amendments are little more than attempted end-runs around the will of the people as expressed in a free and fair election. I believe that the proposed Federal measure is also an attempt to get around an informed electorate making the necessary decision regarding the people’s business and will. Those people who believe that the electorate is not well enough informed to make such decisions seem to forget that it is the same electorate which puts the “winners” into office. Certainly there are uninformed voters in every election, but that is not the fault of the process.
BTW – love the duck story!
May 13, 2010, 9:11 am
RE Senator Crapo:
I like the guy, and have voted for him. But I believe he’s right on the edge of transitioning from “citizen legislator” to “career politician.”
One might argue that the seniority system in D.C. is set up to give career politicians the real power. Which is true. That’s why I’d support TERM LIMITS! (Way too many of them have “been in DC too long.”)
RE Voter Approval of Expenditures:
I like it just the way it is. Granted, a 2/3 majority is a high hurdle… but that’s 2/3 of the people who choose to vote. Those who are “involved” are the ones who vote, and that super-majority has worked for a long time. Bond elections for school improvements, purchase of foothills land, etc., etc., DO get the thumbs-up regularly.
May 13, 2010, 10:22 am
grumpy….if you allow a simple majority then yout taxes will likely double and you will see everything from convention centers to swimming pools at every election. The founding fathers knew what they were doing when they set the rule at 66.6%. I thank them for protecting us.
May 13, 2010, 1:58 pm
Bikeboy, in addition to term limits, we need public financing of election campaigns.
May 14, 2010, 7:09 am
2 Terms? Vote the Bums out!
May 14, 2010, 11:20 pm
Lex, why does a simple majority work in other states if 2/3 is so wise? I would not mind voting more often on more tax increase proposals, since those elected to office don’t seem to have the fortitude to tackle tax issues. Perhaps the voters could, in fact, make the decisions. I don’t think that lessening a democratic vote protects us from anything.
EDITOR NOTE– Grumpy, I oppose a feudal system in which only property owners are allowed to vote. However, in Ada county about HALF of all the assessed property value has NO REPRESENTATION (commercial property like the mall, downtown towers, etc. as well as land owned by non-residents of Ada). In Valley county the vast MAJORITY of parcels are owned by non-residents (mostly cabins). The 2/3 is a legitimate safeguard to prevent 100 voters imposing taxes upon 6,000 land owners….representation WITHOUT taxation is safeguarded with a 2/3 vote.
In the private sector, banks can require a 10% or 20% down payment to sort out bad loan applicants. The 2/3 does much the same thing in sorting out ill-conceived public projects to be funded by those who can’t vote. Good bond proposals are passed all the time.
May 15, 2010, 12:04 am
“Pocketing unspent cash”?? I hope none of our finest have done this… so happy we’ve got Nancy looking out for us. LOL
May 17, 2010, 10:33 am
The Democrats tax and spend the Republicans borrow and spend. We all get stuck for the poor decisions these elected rascals make.
Time for Crapo to get another job lower on the totem pole of having to actually pay for these goofy decisions.
Reality is us Idahonians will reelect him so he can do more of the same.
May 17, 2010, 5:08 pm
All Mr. Crapo has to do to get re-elected in Idaho is say the other guy will take your guns. What a state!