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Utah's state debt unavoidable

Anyone who has worried about debt (and that likely includes almost anyone with a house, a car and at least one credit card) can appreciate what some conservative members of the Utah Legislature are going through. Here the state has accumulated $1.5 billion in new debt of various forms over the last two years, and the governor is talking about adding a lot more.

No one should be overextended. No one should take on debt during good times that may be hard to repay during bad times.Gov. Mike Leavitt wants to increase the general obligation debt load by $70 million and increase the road bond to pay part of I-15 construction to $140 million. That doesn't count all the little lease/revenue bonds of various forms. Put it all together and lawmakers have reason to be concerned.

But they are approaching the question from the wrong angle. Rather than thinking in terms of a homeowner accumulating debt, they should think in terms of a business owner making necessary improvements. In business, a more common adage is that it takes money to make money. Another is that a penny spent now is likely to be worth more than a penny spent tomorrow.

Utah could take a pay-as-you-go approach to fixing highways or building new facilities. Colorado does that, fixing a mile here and a mile there of its highway system, depending on when money is available. But that ultimately can be more expensive than borrowing money. Inflation lifts the cost of construction each year, and inflation in the construction industry sometimes rises higher than in the community generally. Meanwhile, virtually every state industry, from regular commercial activity to tourism, depends on a viable and sound infrastructure to succeed. Opportunities would be lost on all sides.

Much of what the governor wants to borrow would be repaid through leases or other revenues generated by the facilities being built. The construction of college buildings, for example, would be repaid through student fees, research grants and other income. As long as these arrangements are soundly structured and the revenue streams are secure, lawmakers should have no trouble giving authorization to this debt.

All this is not to say Utahns should abandon concern about their state's debt. The latest figures show Utah's debt is equivalent to $811 for every man, woman and child. That may be lower than the national average, but it should not be allowed to rise much higher.

However, at a time when interest rates are low and the economy is strong, a healthy measure of short-term debt is a prudent way to solve many of the state's nagging needs.