Will We get a "Chance to Re-consider" Education Bonds?
It seems some of the higher education establishment feels that the voters made the "wrong choice" last week concerning their rejection of the education bonds.......
By Mark Moore (click "comments" below for article).
posted by Mark Moore (Moderator) at Friday, December 23, 2005
3 Comments:
I guess we get to keep voting until we choose the way they want us to. I know that the vote was close, but an election held two weeks before Christmas is taylor-made for the special interests like universities, to win.
Overall turnout was extremely low. I don't think they will schedule an election two weeks before Christmas again. If they can't win it in an election like that, then what chance do they have in another election where more people are likely to vote?
The plan was structured in an odd way. Supposedly, $100 million or so was going to go to "repayment" of old bonds. The only thing is, those old bonds were COUPON bonds, and there is no practical way to pay those off early. What they wanted to do instead was borrow ANOTHER $100 million, then invest it and use the interest off of that money (along with the principle over time) to pay off the old bonds. That way they could use the money they were now using to pay off the old bonds on current spending.
Tricky? You bet! Inefficient? You bet. There was no gaurantee that the borrowed money could be invested at a rate that would give higher returns than the old bonds had as interest. The analogy used for this bond deal was refinancing a home mortage- only in this case there was no way to tell in advance if the new bond rate would have been better or worse than the old one. All that was certain is that payments would be extended from ending in 2017 to ending in 2031.
The other part of the bond deal had lists of projects from each institution. Like all such lists, some of them are high-value, top priorities items and others are more along the lines of "this money may be available, here is our share, so let's spend it." We don't need to go into debt from that, but we do need to fund the high-priority items- from current revenues!
The pro-higher ed bond folks feel like the negativity generated by the poorly crafted highway bond caused more anti-bond voters to show up than would have otherwise.
They hope that scheduling another vote indpendent of any other controversial issue will produce the result they were hoping for the last time.
There are a certain number of people in this state that work for the colleges and univerities that will benefit from these loans. They are a tiny minority, but they will naturally be more motivated than the AVERAGE taxpayer, who stands to lose, but lose less than the AVERAGE college professor stands to gain.
Because of this, their BEST CHANCE was a special election held two weeks before Christmas, when only like, 7% of the electorage showed up to vote. I agree that the Highway bond hurt them by the 700 votes they needed- but this is still in the context of a special election that was DESIGNED to have poor turn-out so that the special interest group would have a disproportinate impact. They still lost.
If they do this again next year they are either going to have to do it 1) in a general election in which case they lose even bigger because the highly motivated special-interest voters are a much smaller proportion of the votes cast or they will have to 2) call another inconvienient special election- which will get everyone even more upset with them. People will not like having TWO oddball special elections in a row over the same question.
Add to that it gives more time for the word to get out about the dubious method of "bond repayment".
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