MoDOT - Selling Bonds is Bad, So Let's Do It Again..and Again!
August 14, 2011
In March 2004, newspapers reported that MoDOT blamed their previous selling of "Senior Lien" bonds as the reason they were dangerously low on funds, so they had wisely stopped selling the bonds in 2003 at $907 million of the $2.25 billion authorized, leaving them with payments of $75 million a year. A mere six months later, a new director was hired, Amendment 3 was passed, and apparently with no thought about their recent bad experience, they took off on their biggest bond selling spree ever. And it wasn't because they were required to sell bonds under Amendment 3 (see my blog about the truth about Amendment 3). $2 billion of bonds were sold that were backed by the Amendment 3 funds. Then at the end of the decade, bonds were again sold, $142 million for I-64 construction, $100 million for the Mississippi River Bridge at St. Louis, and $685 million for the Safe & Sound Bridge Program. Altogether, a total of $3.8 billion of bonds were sold. Now they are paying $219 million a year in debt service, which will increase to $276 million in 2012 and $284 million in 2016. By the time the bonds are paid off in 2033, MoDOT will have paid over $2.2 billion in interest alone.
Now - imagine this - MoDOT is again dangerously low on funds!! How in the world did that happen? Here's a hint to MoDOT management ... the B word. On second thought, I better spell it out since they didn't get it the first time in 2003 --- BONDS
MoDOT's management now claims that unless extensive cuts are made, they will not have enough state revenue to match federal funding. Enter the Bolder Five Year Plan, the answer according to MoDOT management and the Highways and Transportation Commission, which will cut 1200 of their 6300 employees, close 131 buildings, consolidate 10 districts into 7, and sell off 740 pieces of equipment. This will keep MoDOT afloat for awhile, on the backs of MoDOT's rank and file workers, and the reduction of services to taxpayers.