The State (and School Districts) have a completely separate process and source of funding for capital improvements which is authorized by Article 8 of the Idaho Constitution. This “debt” referred to in the Constitution is commonly known as a “bond” which is just the term for what we citizens would call a “loan.”
Bonds are loans made BY the State to pay ONLY for “capital improvements.” These are understood to be expenses for permanent structural changes to a property that “…enhance its value, increase its useful life, or allow for a new use.” Our Idaho Constitution defines it in more general terms as “…some single object or work, to be distinctly specified…”. So this means projects such as new buildings, highways, bridges, etc that are not paid for out of the State operating budget. Investors buy these bonds (loaning their money to the State) and get interest paid by the State over the life of the loan (or “debt” of the State). The expense of the project is paid by the sale of bonds (loans to the State) but importantly, repayment of the bonds and interest is made from the general fund – i.e. the annual State operating budget.
There are Two categories of public bonds authorized by the Idaho Constitution: The first are those issued by the State for its STATE capital projects and improvements under Section 1:
“The legislature shall not in any manner create any debt…except in case of war, to repel an invasion, or suppress an insurrection, unless the same shall be authorized by law, for some single object or work, to be distinctly specified therein…. no such law shall take effect until at a general election it shall have been submitted to the people, and shall have received a majority of all the votes cast for or against it at such election, and all moneys raised by the authority of such laws shall be applied only to specified objects therein…”
The second category of public bonds described in the Idaho Constitution and noted above authorizes bonds to be issued by the Counties and cities for LOCAL capital projects and improvements including school purposes:
SECTION 3. LIMITATIONS ON COUNTY AND MUNICIPAL INDEBTEDNESS. No county, city, board of education, or school district, or other subdivision of the state, shall incur any indebtedness, or liability, in any manner, or for any purpose, exceeding in that year, the income and revenue provided for it for such year, without the assent of two-thirds (2/3) of the qualified electors thereof voting at an election to be held for that purpose…”
Both STATE and LOCAL bonds are only for capital improvements, but there is a huge difference in the approval requirement. That is all local bonds (not State issued) must get voted in (approved) by a super-majority of 2/3 to pass. Personally, I believe all bonds should require this level of public support but the Idaho Constitution is clear. The State has a much lower burden.
However, WATCH OUT! The LEGISLATURE and the BUREAUCRACY wants to AMEND the Idaho Constitution to REDUCE the requirement for school bonds from its present 2/3 to a simple majority. This is on the table now – See article link:
BAD IDEA just thought you should know…
IMPORTANT FINAL NOTE
The current DRAFT of the Abolish Levies Measure is intended to also abolish school bonds so the State will have to pay for and provide school “capital improvements” as part of its Constitutional duty. Here is the reason for that:
Recall that the Idaho Constitution Section 1, Article IX provides that:
“The stability of a republican form of government depending mainly upon the intelligence of the people, it shall be the duty of the legislature of Idaho, to establish and maintain a general, uniform and thorough system of public, free common schools.”
What does this mean? Common sense tells us that such a system has to have facilities (capital improvements) does it not? Can we have a school without a schoolhouse? No of course not. However, the Legislature is not so clear. They passed a law which says the state education system must, among other things, provide “(a) A safe environment conducive to learning…” Idaho Code Section 33-1612(1a). Does that include a school building? You tell me LOL. Clear as mud.
In any event, this DRAFT Initiative seeks to remove the burden on schools districts to propose and pass bonds in order to maintain and improve their facilities. The STATE should pay for that.
That said, it is far from certain how or if the State Legislature would step up and replace the funding. Right now school bond measures are not doing well – primarily because of the 2/3 super majority. The pass rate for levies is much higher IF ONLY a 50% approval is needed.
A Google search “Idaho School Bond Election Results” yields dozens of local news articles showing bond measures have mostly failed, leaving the schools with leaky and unhappy facilities. So IMO we can’t do much worse.
However, this is a complicated issue and there may be legal questions or obstacles to this part of the Initiative. The good news is any such issues will be aired out via the Attorney General Review process. Assuming they find no major flaws in the proposal, this will put the responsibility and pressure on the Legislature to fully fund schools-including actual classrooms!
We believe this is the best approach. If bonds are needed for schools and classrooms, let the Legislature propose them…
FINALLY…a word on government DEBT…
We all know about the “federal deficit” but what exactly is it? It’s BONDS – trillions of dollars of LOANS made by the federal government in your name. This is a disaster but it’s much worse than many people realize – because these BONDS are not being issued for the legitimate purpose of funding “capital projects.”
No far from it – at the federal level these long term debt bombs are used to fund CURRENT OPERATING EXPENSES. No family or business could last long doing this because it’s financially reckless and unsustainable and they would be refused credit. It is like maxing out your credit card, paying interest that keeps mounting, but you just keep borrowing and spending anyway, with NO LIMIT and NO CHANCE of ever getting out of debt and NO ONE CAN STOP YOU.
Our federal government and the Federal Reserve system are able to manipulate the system and keep this scam going and Congress and the rest siphon off BILLIONS for themselves and their cronies. It should be a crime but sadly – it is not. They pass laws that keep their corruption “lawful.”
Fortunately the Idaho Constitution has a balanced budget clause so the Legislature cannot borrow excessively like the federal government. Here is the Idaho provision:
“Article 7 SECTION 11. EXPENDITURE NOT TO EXCEED APPROPRIATION. No appropriation shall be made, nor any expenditure authorized by the legislature, whereby the expenditure of the state during any fiscal year shall exceed the total tax then provided for by law, and applicable to such appropriation or expenditure, unless the legislature making such appropriation shall provide for levying a sufficient tax, not exceeding the rates allowed in section nine of this article, to pay such appropriation or expenditure within such fiscal year. This provision shall not apply to appropriations or expenditures to suppress insurrection, defend the state, or assist in defending the United States in time of war.”
CONCLUSION -this is why we need an Article 5 convention to pass a federal balanced budget amendment!
