|
Legislature would tend to use the longer
period.
Letters from investment brokers show
that the increase in maturity from 15 to
25 years would increase from an eighth to
a quarter of a point. Again costing far
more. I promised to close off early and 1
will close with one more statement. I spoke
to a financial expert and we can sum it all
in one sentence. He said, let's face it. The
object of debt is to get out of it.
THE CHAIRMAN: Are there any ques-
tions of the minority spokesman?
Delegate Raley.
DELEGATE RALEY: Delegate Stern,
you made quite an issue about the costs
being more, going to be more interest cost,
and that I think is the main thrust of your
argument.
Let me ask you a question. Is it not true
that 'the general obligation bonds, that the
full faith and credit of the State is pledged
behind, that the interest rate for those gen-
eral obligation bonds is cheaper, I under-
line the word "cheaper", than revenue
bonds?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: Yes, it is.
THE CHAIRMAN: Delegate Raley.
DELEGATE RALEY: Do you know or
can you recall how much cheaper they are?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: I have the fig-
ures here and I am sure you do, too.
THE CHAIRMAN: Delegate Raley.
DELEGATE RALEY: Mr. Chairman,
that is all right. The point that I want to
make to you is that is it not true that the
revenue bonds have been financed for a
much longer period, is that not correct?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: That is correct.
THE CHAIRMAN: Delegate Raley.
DELEGATE RALEY: Is it not true that
the reason that the State has put so much
money at a much higher interest rate into
general revenue bonds is because of the
very serious limitation that they had in
the 15-year limit on general obligation
bonds? Is that not true?
THE CHAIRMAN: Delegate Stern.
|
DELEGATE STERN: I would not say
that it is completely true and I would not
say, you are trying to make me say that is
the sole reason, that is not the sole reason.
Revenue bonds are completely different
from general obligation bonds as you well
know, sir, and it is not the sole reason why
so many dollars have been put into revenue
bonds.
THE CHAIRMAN: Delegate Raley.
DELEGATE RALEY: It may not be
the sole reason but it is certainly one of
the reasons and it is one of the reasons
that has cost this State millions and
millions of dollars.
THE CHAIRMAN : Delegate Raley, this
is a period for questions. You will have op-
portunity to debate later.
DELEGATE RALEY: Let me ask just
one more question, then. Has it not to
some extent, although not being the only
reason, has it not cost the State more
money in interest because they had to use
revenue bonds instead of general obliga-
tion bonds? Has it not cost the State more
money?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: I will say gen-
eral obligation bonds are cheaper than
revenue bonds.
THE CHAIRMAN: Are there any fur-
ther questions of the minority spokesman?
Delegate Marvin Smith.
DELEGATE M. SMITH: Delegate
Stern, I had been inclined in the direction
of your report until a comment Judge
Sherbow made. I would like to ask you, sir,
about Judge Sherbow's comment to the ef-
fect that many, or at least some of our
counties using the 15-year bond issue have
not been able to take full advantage of the
moneys available to them simply because
they could not afford to pay the number of
dollars per year, where with a 25-year
bond issue they would be able to take ad-
vantage? What have you to say, sir, about
this comment of Judge Sherbow's?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: It is speculative.
THE CHAIRMAN: Delegate Marvin
Smith.
DELEGATE M. SMITH: Is it a fact,
this is what I would like to get at, is it a
fact that the counties have not taken full
advantage of the 15-year bond issue be-
|
