SJR-8225: Vote yes

We risk sounding a bit conflicted in recommending voters approve Senate Joint Resolution 8225 regarding the state debt limit.

After all, we've just argued against another measure to raise the state's debt ceiling in the preceding editorial.

But this is a drastically different proposal.

Unlike Referendum 52, this measure wouldn't raise the constitutional limit on the state government's debt. The ceiling remains at 9 percent of state revenues whether SJR 8225 passes or not.

We couldn't support the measure if that weren't true. The debt ceiling is a necessary restraint on government growth.

But by putting a dollar limit on interest payments, the state's debt limit is suddenly causing a $100 million problem that no one anticipated.

At issue is a new a federal program called "Build America Bonds." It pays 35 percent of the interest on taxable state bonds and offers a way to reimburse the state for federal taxes.

To take advantage, however, the state Constitution must be changed to allow the debt limited on general obligation bonds to be calculated using the net interest paid (after federal reimbursement) rather than the current "full" interest amount paid.

It's confusing, but the bottom line is clear enough. This minor change means an extra $100 million for state highways and other projects in the first two years alone -- and does it without raising taxes or the state's debt ceiling.

There is no good reason to walk away from that money.

The Herald editorial board recommends voters approve Senate Joint Resolution 8225.