Today we had two  hours of floor discussion on SB 795, which will authorize approx $2 billion dollars in bonds over the next several years to subsidize capital projects at our state universities, parks and other facilities.

It is an enormous bill which dwarfs the size of the 2002 bond bills we passed for higher education and state parks.  Both bonds were approved by the voters in '02 and the majority of projects are now constructed.

Today's discussion was about timing -- why take on such an ambitious spending program when our state economy is so weak and the current state budget is in deficit?

Precisely.

There are three reasons to go to bond this year ....

1.  Interest rates are at an all-time low
2.  Construction costs are cheap compared to recent years
3.  Our state economy badly needs a stimulus.

When times are flush, you can pay for capital projects in cash.  In fact, you should.  That's the traditional "pay as you go" philosophy of Virginia. 

However, when the cash is not on hand, it makes sense to approve a bond.  We can use our excellent "AAA" credit rating which gives us access to cash at low cost.  Plus we can use the lull in the construction market to find builders at a cost well below market.  Finally, hiring these local construction firms will pump money into our economy.

This is not an invitation to waste money.  The bonds will be paid off with real dollars, which are paid by future taxpayers.  So each procurement dollar saved now is a tax dollar saved later. 

But these projects need to be built regardless.  Far better to do them now, rather than waiting until the business climate improves and costs go up again.