Local governments are piling up debt at such an alarming pace that this blogger called it the next crisis “nobody saw coming”.
New Jersey put a cap on the amount local governments can raise by taxation so to keep their gravy trains fueled at least one local government has taken to bonding to make up the difference and nobody with any oversight capacity seems to care. State governments, accountants, rating agencies, and the media all do not want to see the crisis because that would not be to their advantage.
Each year Union County borrows about $40 million for various capital projects but when you look at what they say they will spend the money on by going through those bond ordinances for 2011, 2012, 2013, 2014, and 2015 and putting individual items into a spreadsheet it becomes obvious the county is making up for the loss in taxes and state and federal aid by bonding for it. Consider that over those five years Union County was supposed to have spent $212 million on items like:
- $7.5 million for fixing dams
- $5.6 million to upgrade fire alarms and sprinkler systems
- exactly $206,000 in three separate budget years for storage tank remediation
Then you have expenses for various unspecified improvements and new equipment that are supposed to last between 5 and 15 years but inevitably reappear annually.
All this should be obvious to those on the hook for paying back the money but it’s not been made obvious to them because that would not be in the best interests of those receiving that money.