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cational program. Research in school fi-
nance points up that in a growing school
system school construction requires one
dollar of every eight of the annual school
budget. When this school construction cost
o-ets so high that it requires one dollar in
every six rather than one in every eight,
the ongoing school program begins to suf-
fer. Beyond that point we begin to look to
the school costs first as we do a mortgage
on our home and the money is diverted
from where it should go, instruction in the
class room, to paying school construction
costs. So as in a mortgage when times are
tough and we have a job meeting mort-
gage payments we have to do without some-
thing else. In the case of education what
we do without is a high level of education
in the class rooms in the particular years
when we are caught short.
In our school systems we have to plan
ahead so that we will not get into a situa-
tion where a school program suffers. School
officials must plan their capital construc-
tion programs in such a way that they will
not over-burden their current operating
budgets with excessive debt service costs to
the detriment of their ongoing educational
program. If the State could sell its school
construction loan bonds for 25-year ma-
turity period rather than 15-year periods
that we nowr have it would be a great help
to all of our local school systems and would
save us funds in every school system in the
State.
I urge the support of the committee
report.
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: I yield three min-
utes to Delegate Hostetter.
THE CHAIRMAN: Delegate Hostetter.
DELEGATE HOSTETTER: Mr. Chair-
man, members of the Committee of the
Whole, I feel much like the bantam rooster
in the barnyard when he looked up at the
mule and said, "let's be careful about step-
ping on one another around here", when I
follow the fiscal giants.
The majority indicated in its report that
it had a letter from MOODY'S and STANDARD
AND POORS saying the increase from 15 to
25 years will not affect the State's triple A
rating. However, in my county, Cecil
County, about two years ago we had pend-
ing before the General Assembly a $4 mil-
lion bond issue. At that time one of the
credit rating organizations was contacted
and requested to give us a statement as to
whether or not our credit rating would be
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affected by this bond issue.
The bond issue passed. Two weeks after
it passed our county rating dropped from
triple A to double A.
I believe that the past limitation of 15
years on authorization of indebtedness has
had a very beneficial effect on Maryland's
credit rating and again I would like to
make a quote here from the Majority Re-
port stating that the 15-year maturity limi-
tation has served the State well, it has re-
duced interest costs and has helped to hold
down the amount of state debt. It is one
of the state factors contributing to the
high rating enjoyed by general obligation
bonds of the State of Maryland.
It would appear that by extending this
time there is no doubt but what in the fu-
ture some time our credit rating would be
affected. As far as cost is concerned I am
not going to bother you with a bunch of
arithmetic but by extending from the 15-
year period to 25-year period an increase
in interest cost of 76 percent results.
I submit that it takes no Einstein to see
that the taxpayer is being placed at a dis-
tinct disadvantage from this standpoint.
I, therefore, support the amendment.
THE CHAIRMAN: Delegate Sherbow,
you have one minute you may yield.
DELEGATE SHERBOW: I yield that
one minute to you.
THE CHAIRMAN: Thank you.
Delegate Stern.
DELEGATE STERN: Three minutes to
Delegate Henderson.
THE CHAIRMAN: Delegate Henderson.
DELEGATE HENDERSON: Mr. Chair-
man, fellow delegates, it seems to me the
fatal tendency in governments is to borrow
rather than pay their way. We see an ex-
ample of that in Washington where we
have had an unbalanced budget for nearly
50 years. The dead horse which is around
all our necks has to be paid off or it re-
sults in defalcation and inflation and has
all sorts of disadvantages.
We have been blessed in this State I
think by paying our way and having a bal-
anced budget over those same years. We
have been able to pay off our indebtedness
as it fell due in the 15-year period. If we
had had 25-year periods permitted I think
we would have an entirely different picture.
To talk of this proposition as a compro-
mise seems to me to be ridiculous. As Dele-
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