Count Me Out On College Bonds

My objections are three-fold. One is the way about half the money is being used to allegedly "pay off" old debt, and the other is that many of the new projects will be used to expand capacity beyond what our economy is able to absorb. The third objection is that we have ample cash on hand to meet higher eds true qualitative improvement needs without new debt.

Only $150 million of the $250 million bond money would go into new projects. $100 million would be put in a fund and invested in the hopes that the investments make enough to pay off previous bonds as they come due. There are no guarantees our returns will be high enough to make that profitable. Why pay interest and fund management fees when we have a surplus? Why not just pay the bonds off as they come due, since you can't pay them off early anyway? Some fund manager is going to make a ton of state government money off of this. I’d rather the people kept their money.

The focus of the spending should be on increasing the quality of the university system rather than expanding its capacity. It’s a mistake to go into debt to over-expand your higher-ed capacity beyond the quality jobs available. You have to start with making the general business climate in the state more favorable. The key to that is to cut taxes, over-regulation, and public debt. Once the jobs are here, it will power the economy. Money to expand the education system capacity will follow. If you start by expanding the capacity of the University System beyond availability of the good jobs, all you are going to do is subsidize the economies of Dallas and Chicago. Our college graduates would have to go there to get good jobs. We in Arkansas would provide the training costs, and those other places would reap the benefits.

Lastly, we don't need to use debt. In December, the project they talked about the most was the E-corridor. They said we needed the bonds to build the E-corridor. A week after the people voted the bonds down the first time the U of A Fayetteville announced they had the money to do it anyway. They ‘found’ $6.4 million of the $10 million or so needed to wire the whole state system. I think the same thing will happen with many of these projects. Let’s say “no” to the bonds, get the higher ed system about half of that $150 million from using about 10% of the surplus and some of our General Improvement Fund money. Then the people will have no new debt, no fund management fees, and no new interest payments. The colleges can pick the projects they think are most important.