South Carolina’s feisty U.S. Sen. Fritz Hollings sounded the alarm for years on wasteful government spending. He wailed about the federal government’s profligate spending of more money than it took in, a practice that required boatloads of borrowing. In turn, that caused the government to incur huge costs to pay for interest costs on the borrowing, which he decried as flushing good money down the toilet. Thirty years ago, for example, the federal borrowed a billion dollars a day just to pay interest costs. Today, it’s way worse.
Now comes Charleston County Council, which on June 18 passed the second of three readings of a measure that would allow it to borrow $1.8 billion to pay for its whopping share of a proposed $2.3 billion extension of Interstate 526.
The proposed resolution for voters in November calls for 25-year renewal of a half-cent sales tax, which would generate a total of $5.4 billion. About half of the money would go for the highway, with the rest spread across the county for various road projects, greenway improvements and more than $200 million in supposedly paid projects not finished from the last sales tax referendum.
This new proposed referendum is fiscally irresponsible for one big reason — wasteful spending on interest. While we fully understand the concept and strategy of bonded indebtedness — borrowing now and paying off the debt with interest — how do you feel knowing that 64.8 billion of those sales tax pennies will be spent on interest costs alone? Yes, the referendum proposes spending $648 million in interest for the privilege of borrowing $1.8 billion of the county’s share of the expanded interstate. That’s more than a 30 percent cumulative fee to borrow money. It’s utterly ridiculous and offensive.
“We have an awesome responsibility … to see to all the traffic needs of the county,” council member Larry Kobrovsky told the Charleston City Paper earlier this week. “I’m a fiscal conservative and a conservationist, and this fails on both hands.
“Those in favor of it think you’re either for this or you want everyone to sit in traffic, but I don’t think this is the only way to do that,” he added. “Even if we pass this, it will be 15 years before anyone starts feeling any sort of alleviation from it.”
Regardless of how you feel about the interstate extension, is it really worth spending hundreds of millions in interest costs when that money could be put to much better use?
If the referendum makes it to the November ballot, we will urge voters to reject it to avoid wasteful spending of hundreds of millions of dollars for borrowing costs.
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