UPDATED: Port Developments
Last week I commented on the good news “that there is movement in the Legislature–specifically a commission headed up by Jamestown Rep. Deborah Ruggiero–to develop Quonset/Davisville as a short sea shipping port.”
To accomplish this, dredging of the harbor would be necessary. According to the story from the ProJo, “The commission recommended that the state issue $7.5 million in revenue bonds to pay for the dredging.” In reaction to this, I wrote:
So…we’re going to have to go the bond route. Of course, we don’t have to go that way. There’s a remarkable vehicle that could be used to fund the dredging that wouldn’t require the state taxpayers taking on more long term debt: It’s called the State Budget. Of course, that may require re-prioritizing expenditures and the like. I guess we can’t have that.
Rep. Ruggerio contacted me to clarify that the Governor’s budget, specifically Article 7 (PDF), does indeed contain language regarding the bond and that she is submitting separate legislation only as a backup plan in case the article doesn’t pass. So, contrary to what I wrote, the budget is the vehicle being used. Yet, regardless of the the method being used, the proposal is still to fund the work via a bond with the associated debt. Here is the pertinent section of Article 7:
Quonset Development Corporation Revenue Bonds
This article authorizes $7.5 million in debt for various capital projects including, but not limited to, harbor, pier, port, channel, dredging and other costs related to the Davisville Piers Improvements Project at the Quonset Business Park. Total debt service is not expected to exceed $911,200 annually and $9.1 million in the aggregate, based on an average interest rate of 4.0 percent and a 10-year maturity.
The bonds or loan agreements issued pursuant to this article will not constitute the indebtedness of the State, and required payments will be derived from Corporation revenues. The Corporation has identified several sources of revenue to contribute to this debt service, including increasing the tariff on dockage from $3.00 to $6.00 per foot ($243,750 annually), increasing the tariff on wharfage from $3.00 to $6.00 per vehicle ($160,000 annually), and contributing $507,456 annually from operating funds. The authorization for this debt applies to bonds issued within one year of the passage of the resolution.
My thanks to Rep. Ruggerio for clarifying the technical aspects, but I still remain critical of the method. In addition to the dredging, Article 7 contains $201 million in proposed bond referenda (including more Transportation bonds) and $278 million worth of “budgeted” debt authorizations (including the dredging).
Whether a bond is passed as part of the budget, via a referendum or in a separate piece of legislation, my original contention remains: Though I understand the philosophy of spreading debt out over X number of years, I’m critical of the bond avenue because I believe that we are asked to fund too many bonds to pay for items that should be paid for via appropriation from the general revenue, not as loans with interest. If the dredging was funded through a regular appropriation, the $7.5 million worth of work would cost $7.5 million, not $9.1 million. I also understand that we can’t appropriate everything on the bond wishlist using today’s funds, but that’s where setting priorities comes in.
Setting aside my philosophical qualms, thanks again to Rep. Ruggerio for the clarification and, more importantly, for taking leadership on this item.