By Howard Fischer
Mail | Twitter: @azcapmedia

PHOENIX – A Tempe senator had three words for a Chandler lawmaker’s proposal that effectively would kill forms of borrowing legislators have used for years.

“This is nuts,” said Sen. Mitzi Epstein, D-Tempe, referring to SCR 1033, Sen. J.D. Mesnard’s proposal to add some specific strings to a $350,000 debt limit crafted in 1912 along with the Arizona Constitution.

Mesnard, a Chandler Republican, wants to make it so lawmakers could no longer simply find more creative ways to borrow money during financial downturns.

For example, off limits would be an idea used to finance construction of new state buildings. Instead, the state would have to have the cash up front.

And gone would be the idea of putting off payment of one year's obligations into the following fiscal year, a maneuver used - and still being used - to comply with the constitutional requirement that the books be balanced each year on June 30.

That last provision, if approved by voters, would have immediate implications. It would mean that the $800 million "rollover'' of state aid owed to public schools that began a decade ago - and still on the books - would have to be paid off immediately.

Existing debts would be unaffected, and SCR 1033 would not impair the power of universities to float bonds for projects, nor the ability of the state Department of Transportation to borrow money for road-construction projects as long as the debt was paid from future gasoline taxes and vehicle registration fees.

But everything else above $350,000 would become illegal going forward.

All that still leaves the question of whether a debt ceiling set in 1912 - the one that Mesnard wants to make enforceable - is appropriate in 2024 and beyond, in perpetuity. What was $350,000 in 1912 calculates out to about $10.5 million now.

The problem, he told Capitol Media Services, is that the constitutional provision has become "meaningless.''

"Eventually, we're going to wind up in a situation where people are going to be tempted to incur more debt to finance government,'' Mesnard said.

Only thing is, it leaves state lawmakers with fewer tools the next time the bottom drops out of the economy.

Epstein, the Senate minority leader, had a different take on what Mesnard wants to do.

"This is nuts,'' the Tempe Democrat said.

"This would mean, basically, that the state cannot take out any loans.''

What it also does, she said, is ignore the financial reality that businesses understand: Sometimes borrowing makes sense.

"If we want government to run like a business, then we need to be able to take out loans,'' she said.

And it's not just business.

Most Arizonans, when purchasing a home, don't wait until they have accumulated the cash. Instead they take out a mortgage, similar to how the state has constructed several new buildings.

Mesnard rejected the comparison.

"The average person also doesn't have to buy a new home or homes every single year as the state does,'' he said. And each new "mortgage,'' Mesnard said, adds to the state debt.

The measure cleared the Republican-controlled Senate earlier this month on a party-line vote and awaits House action.

Approval there would send it to the 2024 ballot; the governor gets no say on such referrals.

We’d like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org.