EDITORIAL: Why debt ceiling matters here

CALL ME SOFT, but I like clean water and flush toilets, too. Maybe I need to go to a summer camp and toughen up. But I have to save my money so I can pay my taxes to keep the water safe and the sewage system working.

People who have their own wells and septic systems won’t have much sympathy for my lament, but the same principle applies not only to central services like water and sewer, but to the infrastructure we all share. Think of roads and bridges, and then add to the list all sorts of services like the systems that prevent water pollution and stop poisons from getting into the dirt where our food grows. It’s not that roads and bridges and pollution protections are going to disappear, but taxpayers could soon face much bigger bills for the upkeep of these things.

 

Water and sewer costs come to mind because the Villages of Chatham and Valatie are facing huge bills to upgrade their sewage treatment systems. Pollution has made news because the Town of Copake has to replace two leaky fuel tanks at an unanticipated cost of $100,000. Don’t even ask how many bridges the county and state must fix soon or consider restricting or closing. And these cases represent only a handful of the urgently needed public works projects local taxpayers face.

Let’s assume that a majority of taxpayers wants to spend public funds to address one or another of these problems. Will enough of them agree, or will the new 2% cap on property taxes statewide leave us stuck without the funds to repair what’s broken? I supported the tax cap because I don’t believe anyone offered a better method for reining in spending at the local level. The cap can be overridden, but only with a supermajority of 60% support, and who can say whether that many people would vote to raise their own taxes in these hard times. I still believe the cap may impose fiscal discipline and keep local tax bills more affordable, but I’m concerned now that this approach, which has yet to be tested in this state, may not have a fair chance if Congress bets our future on not raising the debt ceiling… and gets it wrong.

Earlier this year some sincere folks assured us that the world was about to end. I admit it has been a hot summer, but my tomatoes are ripening, which I take as a hopeful sign that the doomsayers miscalculated by a few billion years. In the House of Representatives in Washington some members, including Chris Gibson (R-20th), seem poised to allow the nation to oppose bipartisan efforts to raise the nation’s debt ceiling. If they prevail and the House doesn’t come up with a bill by August 2 to raise the ceiling in a way that’s acceptable to the Senate and President Obama, the federal government may default on some of its financial obligations. Does that mean financial calamity follows on August 3? No.

But responsible economists and financial experts do predict that with a limited default or with a temporary fix that leaves open the possibility that this same debt-limit brinksmanship will replay just before the next presidential election, interest rates will go up. Other bad things might happen to the economy, but put those predictions aside for the moment. If the country’s credit rating goes down because it’s not clear there’s a will in Congress to pay our bills, borrowing will get more expensive.

Citizens of Chatham, Valatie, Copake and plenty of other municipalities have difficulty paying for the maintenance and repair of the services we already have. And while we’re all likely to face cuts in services regardless of what happens about the debt ceiling, a substantial rise in interest rates could put the cost of repairing vital infrastructure could become too expensive for many taxpayers who previously could pay their taxes. That affects each of us in different ways, none of them good.

Maybe there is some fallback plan to cushion the impact on small communities like ours if interest rates go up at a time when neither incomes nor job prospects are improving. But what is that plan and how will it help Chatham, Valatie and Copake and the rest of this county? Without a program that offsets an interest rise, any position that blocks an increase in the debt ceiling is by far the most economically reckless and hurtful thing the government could do. We urge Rep. Gibson to put his constituents ahead of ideology when he casts his vote.

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