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Integrity Schmegrity
Virginia
once nurtured its reputation for the integrity
of its finances and debt. No longer. Legislators
have reneged on solemn promises to voters and bond
holders.
Virginia
has a truly enviable reputation for integrity in
government. Not perfect, but unsurpassed by any
other state. To preserve that reputation requires
constant vigilance.
That reputation, sadly, is being undermined by the conduct
of some of
Virginia’s
senior elected officials. For decades, a new
and dangerous way of thinking has insinuated its way
into our politics and governance.
First, many Virginians are painfully aware that some
politicians no longer feel obligated to honor solemn
promises made during election campaigns. After an
election, these pledges are too often treated like
stale campaign signs and literature, all of which go
out with the trash. Gov. Mark R. Warner has not
only discarded his own 2001 campaign pledge never to
raise taxes, but has said that some incumbent
legislators are campaigning not to raise taxes while
privately assuring him that they will support his
proposal to increase taxes next year.
Promising one thing and doing another after an election may
be acceptable behavior in other states, but it
should never be tolerated in Virginia.
The voters should severely punish any politician who
practices this kind of behavior.
Second, there is another kind of dishonorable conduct that
must be rooted out now. It is the practice of
allowing governmental bodies to sell bonds relying
on the promise of elected officials that
the government will repay them, when those officials
have no present intention of honoring, or later feel
free to ignore, such a promise.
A recent example involves the bonds issued several years
ago to finance the construction of the Virginia
Horse
Center
near Lexington.
The senior members of the General Assembly assured
the Rockbridge County Industrial Development
Authority in 2001 that they would support the
appropriation of annual debt service on these bonds,
knowing that the authority relied on those promises
and would include that information in its
prospectus. Those who bought the authority’s bonds
relied on that prospectus.
At the 2003 General Assembly session, the legislator who
chairs the Senate Finance Committee, John H.
Chichester, reneged on his repeated assurances that
he would support an annual appropriation of debt
service on the Horse
Center
bonds.
Chichester
used his seniority and influence in an attempt to
strip money out of the state budget for such an
appropriation. A compromise funded a smaller amount
to a private foundation for ultimate use in
servicing the debt.
It is dishonorable for state officials to induce others to
purchase the bonds of a governmental body of this
Commonwealth on the basis of explicit commitments,
then to renege on those commitments. This conduct
will have an adverse effect on future efforts to
sell bonds of state and local entities in Virginia.
At some point, bond buyers and investment bankers
will no longer count on the word of Virginia
officials.
Chichester’s
change of position was both unexpected and
remarkable. Just two years earlier, in committing to
support paying the debt service out of state funds,
he had heaped praise on the Horse Center for
contributing “significantly” to the growth in
tax revenues and the vitality of the region, while
achieving a balance between state and private
financial support. This past February, however, Chichester
called the Horse
Center
a “cancer” on the state budget. It is no more a
cancer now than it was at the outset, and no less
malignant than the state-supported Jamestown-Yorktown Foundation, on which
Chichester
serves as a board member.
Next week:
It’s time to bar the issuance of these
“moral obligation” bonds.
May 12, 2003
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