Mass. lawmakers OK nearly $16 billion in borrowing

It wasn't exactly a spending spree, but for state lawmakers and Gov. Deval Patrick eager to find money for pet projects it was the next best thing - a borrowing spree.

In the legislative session that recently wrapped up, House and Senate lawmakers authorized an unprecedented level of borrowing - nearly $16 billion - for everything from roads and bridges, to state colleges, park repairs and affordable housing projects.

Although the bills simply allow the state to borrow money in the future - as opposed to the state budget, which spends actual tax revenues - the crush of bond bills and the level of authorized borrowing is unprecedented in a single session, said Michael Widmer of the business-backed Massachusetts Taxpayers Foundation.

Despite the surge in authorized borrowing, there's no guarantee that every project included in the bills will receive funding anytime soon. Some of the bills have life spans of 10 years, and it's up to the administration to decide which of the projects to borrow money for first.

"They always pass these authorizations with a lot of fanfare as if they are going to spend the money immediately, but a lot of these bond bills are over five or ten years," Widmer said. "There is the issue of giving false expectations that they'll be spent in the near term."

Widmer said the level of authorized borrowing, while unusual, doesn't pose a fiscal risk to the state in part because of a self-imposed cap on the amount of bonds the state can issue in a single year.

Last year Patrick increased the so-called bond cap from $1.25 billion to $1.5 billion. The last time the bond cap was raised before that was in 2002.

Even though the authorizations simply allow the state to borrow money, some on Beacon Hill say the glut of bonds bills this legislative session doesn't make sense.

They also fear that borrowing too much money could lead to a call for tax increases.

"You just can't keep spending and borrowing at that rate and expect that taxpayers are going to continue to pay higher taxes," said Republican Party Chairman Peter Torkildsen, adding that Patrick is "borrowing so much that he's going to turn around and ask for a very large tax increase."

Patrick has said no new taxes are planned, but he also hasn't ruled them out.

The governor defended the proposed borrowing, saying the administration's bond bills have been reviewed by independent analysts and Wall Street.

"The bonding is based very much on an affordability analysis," Patrick said. "Our capital plan is not a wish list. There are some choices that we made."

He said the administration has the flexibility to make borrowing choices in future years based on the state of Massachusetts' economy.

"We can even speed it up if things get really great or slow it down if we hit a wall," he said.

On Monday, Patrick signed another bond bill that included $658 million for courthouse improvements, $452 million to overhaul the state's information technology systems and $100 million for 31 new libraries.

Among the bonds bills approved by lawmakers this session were a $2.2 billion, 10-year higher education bill to help pay for new building and renovation projects at the state's public colleges; a nearly $3 billion, eight-year bill to help repair up to 300 of the state's most neglected bridges; and a $1.3 billion, five-year bill to create and maintain the state's stock of affordable housing.

Widmer said the administration has to be cautious before deciding to borrow the money needed to pay for the projects included in the bills.

"Depending on what happens in 2009, it could be a cause for concern," he said. "Your revenues are declining and then you're carrying more debt, so they need to be careful."