Tuesday, November 4, 2008

Voters Will Decide Whether to Borrow for Water, Sewer Repairs

Pennsylvania voters will decide on Election Day whether the state should borrow $400 million for water and sewer infrastructure repairs.

John Schombert is Executive Director of the 3 Rivers Wet Weather Demonstration Program, which has worked with Allegheny County municipalities to coordinate their repairs. He says the bond issue would be good for the state because it would let municipalities borrow money for the repairs at lower rates than they could get on the commercial bond market. The alternative, he says, would be higher water and sewer rates. With an estimated $70 billion in repairs needed statewide over the next 20 years, Schombert says rates are bound to go up anyway--but the bond issue would make those increases less extreme.

Matt Brouillette, President of the Commonwealth Foundation, says the bond issue isn't necessary. He says the state could find the $400 million it wants to borrow if it reprioritized its spending. Brouillette says lawmakers have approved borrowing for pork-barrel projects when fixing the state's aging infrastructure should have taken greater precedence. He also says the borrowing comes at a bad time, since the poor economy has made lenders more hesitant. The Commonwealth Foundation estimates that the total cost of the bond issue will be closer to $620 million.

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