Last session no bonds were approved to finance long-term construction projects because the House and Senate could not agree on an amount.
This session both chambers have passed bond proposals, but those bills do not really stake out the position of House and Senate leaders on the amount of bonds they will support.
The House passed a handful of bills to authorize the sale of bonds to finance construction projects at universities and community colleges, historical preservation projects and a new building at the University Medical Center in Jackson.
The total of the House bills for the upcoming fiscal year would be about $182 million. But the House did not pass what is known as a general bond bill to deal with state agency needs or for local projects throughout the state.
The Senate has passed a bond bill totaling about $10 million. But the proposal, often referred to as “a dummy bill” in the legislative process, has all the code sections alive so that it could be amended late in the session to include any bond project.
“My goal is to pass a reasonable, rational bond package,” said Lt. Gov. Tate Reeves, who last year blocked a bond agreement when he said the House’s package was too high. House leaders contended their request would not have added to the state’s debt.
Reeves said he does not have a specific number for the amount of bonds he will support this year, but said the goal is “to meet the critical capital needs” while “reducing the overall debt burden” of the state.
He said the state will pay off about $240 million in debt this year, but that does not mean that is the size of the bond package he will support. Bonds are authorized by the Legislature, but the bills routinely give the three-member Bond Commission of the governor, attorney general and treasurer the actual authority to issue the bonds.
He said about $1 billion in bonds have been approved by the Legislature in past years, but have yet to be issued by the commission. Some of those will never be issued because the projects they were authorized for never came to fruition.
But Reeves said the Bond Commission issued $100 million in bonds this past year even though the Legislature did not authorize any new bonds during the 2012 session because of the disagreement on the size of the package.
Currently the state’s total bond debt is about $5 billion and it will cost about $375 million during the coming year to pay toward the retirement of that debt.
Of course, with interest rates at record lows, many say now is the time to issue debt.
But Speaker Philip Gunn, R-Clinton, said of the House package, “I think we have been very conscious of expenses and costs. We are trying to hold the bonds to only those items that are absolutely necessary ... We are trying to be very cautious.”
Often in recent years, the Legislature has financed maintenance and repair projects with bonds because of a shortfall in general fund dollars. Leaders in both the House and Senate have said, generally, that projects that do not last at least 20 years – the normal time to pay off a bond – should be financed through a normal appropriation instead of a bond issuance.
And this session it appears the Legislature will make a $20 million appropriation to counties to repair deficient rural bridges instead of providing the funds through bonds.
Rep. Steve Holland, D-Plantersville, said it is important to remember bonds “can enhance the quality of life for all Mississippians,” such as the bonds that were matched with local funds to make improvements to the Elvis Presley Birthplace and Museum to entice more tourist dollars to Lee County or the bonds issued to provide the incentives to lure Toyota to Blue Springs.
Another Toyota-related project, an advanced vocational school funded in part by Toyota donations, will not likely be part of any bond package this session, various Northeast Mississippi legislators have said. There have been some efforts in the past to garner state funds to construct the school that would be available for students in Pontotoc, Union and Lee, which are the counties that worked together to lure Toyota to Northeast Mississippi.
But apparently there is not agreement among area legislators about the project.