We can think of many reasons to support borrowing for public school and community college buildings.
The most obvious reason: Borrowing is the only viable option when the need for building dollars is greater than the cash available. Families routinely avail themselves of that option when needing a new or bigger house. It’s also the viable option for Johnston County’s public schools, which have a healthy bank account but aren’t sitting on $57 million in cash. Ditto for Johnston Community College, which doesn’t have $7 million lying around.
Here’s another advantage of borrowing, another one familiar to families with home mortgages: As income grows, the fixed debt payments become less of a burden. The same holds true for county governments that borrow money for school and college buildings. As revenue grows – as tax receipts grow – the fixed debt payments become a smaller percentage of spending.
It helps too that government can borrow money cheaper than the rest of us, which means the interest on the debt will be smaller. And bonds are attractive to investors because their interest earnings are usually exempt from federal and state income taxes.
But our favorite reason for borrowing money for schools is that it forces future taxpayers to share in the cost of those schools. We suspect Johnston County could build a single school or community college building with the cash it has on hand. But if it did so, future taxpayers, including newcomers to Johnston County, would not share in the cost of those buildings, even though those buildings would be in use for decades. A bond issue of 20 or 30 years ensures that future generations of taxpayers share in the cost of housing their schoolchildren and college students.
On Nov. 5, Johnston County leaders will ask voters to borrow $57 million for the public schools and another $7 million for JCC. We say vote “Yes” twice, partly for practical reasons: It’s the only way the county can afford new buildings. But also vote “Yes” twice for selfish reasons: People who don’t even live here yet shouldn’t get school buildings for free.