Debt service to crowd out education spending – and everything else
Posted in UncategorizedOver the years, Superintendent of Public Instruction Jack O’Connell has developed a sixth sense for steering clear of political potholes. So it was puzzling to hear him call for $9.9 billion worth of bonds for school construction one day after state Treasurer Bill Lockyer warned that California is already bonded up to its eyeballs — at its peril.
“There is an obvious need to improve school facilities throughout California, and we cannot afford to wait to meet this need,” O’Connell said in a press release after testifying at a Senate hearing on school facilities.
But wait we probably will.
According to Lockyer’s lastest report on debt, by 2013, a record $10 billion in interest and principal on state debt will eat up a whopping 11 percent of estimated $91 billion in state revenue. Most of the money will pay off general obligation bonds, but more than $2 billion will cover short-term borrowing that bailed the state out of this year’s financial crisis. Then there’s the $11 billion in water bonds that the governor and legislators will ask voters to pass in November. The state would start paying them off, too.
Debt will continue to squeeze out money for education, state parks, child care and all sorts of good things for years to come. Debt service totaled only $2.5 billion a decade ago and jumped to $6 billion this year, a 143 percent increase while revenue this year was
“There is an obvious need to improve school facilities throughout California, and we cannot afford to wait to meet this need,” O’Connell said in a press release after testifying at a Senate hearing on school facilities.
But wait we probably will.
According to Lockyer’s lastest report on debt, by 2013, a record $10 billion in interest and principal on state debt will eat up a whopping 11 percent of estimated $91 billion in state revenue. Most of the money will pay off general obligation bonds, but more than $2 billion will cover short-term borrowing that bailed the state out of this year’s financial crisis. Then there’s the $11 billion in water bonds that the governor and legislators will ask voters to pass in November. The state would start paying them off, too.
Debt will continue to squeeze out money for education, state parks, child care and all sorts of good things for years to come. Debt service totaled only $2.5 billion a decade ago and jumped to $6 billion this year, a 143 percent increase while revenue this year was
