Human Behavior

There is definitely no logic to human behavior.

Watch out for your wallets

Our state constitution and official code are embedded with provisions that have one simple purpose: they are there to keep politicians and their cronies from looting the public treasury and leaving taxpayers with a mountain of debt to pay off.

Thus it is that the General Assembly can include bonds in the state budget to raise money for capital projects, but the level of that bonded debt cannot exceed 10 percent of one year’s worth of tax revenues.

State officials are not allowed to spend money in ways that would provide a “gratuity,” a financial benefit, to a private party.

When local governments issue bonds to build new courthouses or other facilities, they are required to get voter approval in a bond referendum.

These are wise limitations and we have them because we know that politicians have to raise money from contributors to get elected to public office. These contributors are frequently builders, developers and contractors who expect to see a return on that investment in the form of projects to build public roads, bridges and government edifices.

Because of the Great Recession and subsequent economic downturn, state and local governments have cut back on infrastructure projects. Local citizens, especially conservative groups like the tea party organizations, have become more resistant to the idea of raising taxes for this purpose.

This has been a troubling trend for construction and engineering firms that have long depended on government work as a source of business. That particular revenue stream has run dry in recent years.

What can these interest groups do to get around all these troublesome limitations on bond debt and public spending?

One way is to authorize state and local governments to form private-public partnerships, known by the abbreviation P3, where a private firm takes on part of the financial risk of erecting a government facility in return for getting access to public funds.

These P3 partnerships were authorized several years ago to build toll roads. There is now a bill pending in the Legislature to allow the same sort of public-private relationship for “vertical construction” projects like government buildings.

At a legislative hearing last week on the public-private bill, known as SB 255, the hearing room was packed with well-dressed lawyers and fast-talking lobbyists who represented engineering, construction and development firms.

“It’s all been very positive,” Sen. Hunter Hill (R-Smyrna) remarked near the end of the hearing. “Is anyone opposed?”

Not surprisingly, all the audience members thought the bill was a great idea.

The lobbyists at the hearing tended to use the same corporate buzzwords and jargon in their sales pitches to the lawmakers.

By allowing these partnerships with outside companies, they said, legislators would be able to “unleash the creativity and innovations of the private market” to get these government construction projects underway.

Stop and think about that for a moment. We’re talking about generic government buildings. How many “creative” and “innovative” ways are there to dig a foundation, frame up a building, and put a roof on it? This is basic construction work that you would want to achieve in the most economical way possible for the taxpayers.

Another phrase tossed around by several of the lobbyists was that these public-private proposals were “just another tool in our toolbox.” Time and again they came back to the analogy of tools and toolboxes.

Let’s remember that “tool” spelled backwards is “loot.” I fear that if this particular bill should pass – and there are some influential people with money who will try to get it passed – then you could see some large-scale looting of the public treasury.

Governments obviously have a need, on occasion, to build new roads, schools, courthouses and other facilities that provide services to their constituents.

There’s a simple way to get this accomplished. If you need a new building, then allocate tax funds or float a bond issue to pay for it. If the voters approve the bond issue, that’s fine. If they don’t approve it, then that’s fine as well – in our democracy, the voters should have the final word on these major spending decisions, not some developer in an expensive suit.

One final piece of advice if the General Assembly should approve that public-private bill: watch out for your wallets.

Georgia is a state whose politicians have long displayed a genius for grabbing the taxpayers’ money even when the constitution tells them they legally can’t do it.

Remember, one of the biggest scandals in this nation’s history, the Yazoo Land Fraud, took place right here within our state boundaries. The scandals have not stopped either.

© 2013 by The Georgia Report

Tags: government infrastructure , Hunter Hill , public private partnerships

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