SB30 would open the flood gates to taxpayer backed bailouts of private ventures. This is not just about dumping 30 million on some rich white guys with a dream in the North Country; a dream more likely to fail than not by the way (otherwise they wouldn’t need public money would they?). This is also about piling on more interest on the old debt we have and the new we will quickly accumulate, should SB30 pass. More debt harpoons the bond rating which costs us more in interest payments.
Increased interest on debt saps the budget and leads to more and ever-higher taxes to pay debt service, all so cronies can bail out private investors when it suits them.
The vote is today. Reach out and touch someone in the NH House. Let them know that this bill is bad for NH and we are watching.
Note: Saturday we spent some time on the broader risks associated with the legislation. Rep Abramson documented the highlights in an email you can read on the jump.
(In response to an Email from Rep Lynne Ober to all reps – not included here. Ober and leadership support the bailout legacy SB30 will create.)
From: Max Abramson <MaxAbramson@gmx.com>
Date: Sun, May 3, 2015 at 2:57 PM
Subject: Re: SB 30 – The devil is always in the details
To: Lynne Ober <Lynne.Ober@comcast.net>
Cc: All Reps <HReps@leg.state.nh.us>
Proponents of SB30 supply the main reasons why we need to be voting against this version of SB30:
1. The Balsams is just the first, they offered. In other words, they want the State to cosign many other projects where the taxpayer is made to cosign on private projects like this. If we approve this, there will be another and another and another after that.
2. They admit that, ultimately, the taxpayers would be on the hook for the full cost of this if it went under again.
3. Supporters of the now infamous “Balsams Bailout” advocate this because they don’t want their young people moving down to southern New Hampshire to get jobs, but to work as servants, cashiers, ski instructors, etc, at the Balsams–but not working on Northern Pass or gambling. In other words, it’s not about young people getting jobs, but wanting them to be closer to their parents who don’t want to move closer to where the rest of us live. That would be a great deal for us if we could all live up in the mountains away from everyone, but still be able to force everyone else to subsidize our jobs.
Online, there is overwhelming opposition to the bailout. Many question what benefit that they’ll get–no lift tickets, no room discount, etc. “Crony capitalism” and “bailout” are the terms being used by the public, and public confidence in our system is already at an all time low. Why can’t Mom & Pop Groceries get a loan guarantee? Why do they have to guarantee the Balsams loan?
Moody’s, S&P, and Fitch Ratings look at total liabilities and factor that into our debt rating. Since every professional economist in the country opposes the use of public funds to subsidize or guarantee private projects, opening up the flood gates on the Balsams, which 90+% of the general public receives no benefit from. Last I checked, the State is carrying $2.619 billion in tax guaranteed debt, and a slight reduction in our bond rating will greatly increase our borrowing costs.
25 years ago, New Hampshire effectively cosigned for a $15 million load to float an air shuttle service called Business Express, which wanted to try out an unproven price model in the marketplace. In 1996, they filed for Chapter 11, leaving the State on the hook for $15 million. In 2000, they ceased operations, leaving us with no jobs and no service.
I’ve spoken with many business people and investment advisors who said that they would never advise their clients to invest money in something like this. There’s a reason that this project finally went under, and a very good reason why unincorporated areas aren’t allowed to borrow $28 million that they have no hope of repaying if this goes belly up.
Rep. Max Abramson
Rockingham 20
