Lawmakers may have to slow down road projects to keep prime bond rating

State road bosses may have to slightly slow down some of their $1 billion construction over the next few years to meet a self-imposed borrowing requirement set by the GOP-controlled Legislature.

Utah Department of Transportation executive director Carlos Braceras promised legislative leaders Tuesday afternoon that no matter what, he won’t exceed what’s called the “50% debt limit” in state law.

And it may well be, ultimately, that (oddly enough) the state’s booming housing market – which translates into the overall property evaluations statewide – may bail out Republican lawmakers.

For the conservative budget-adopters put into the 2017 Legislature’s $1 billion road bonding bill a requirement that the state debt limit cannot exceed half of the constitutional debt limit.

Sound confusing?

You ain’t heard nothing yet.

Also mixed into the debt ceiling is earned leave of state workers – which according to those odd New York credit raters must be counted as part of a state’s debt.

In any case – bottom line – Executive Appropriation Committee members (the leaders of the House and Senate, both political parties) were told that in fiscal years 2019 and 2020 the state could be over the 50% statutory debt limit unless something is done.

Of course, in the 2018 Legislature Republicans could just amend current law to increase that 50% level.

But short of that, this Friday the state Transportation Commission will formally adopt revised bonding/spending programs for the next several years, Braceras said.

And some state road projects may have to be “slowed down,” as Braceras put it, for in no case will UDOT bond more than the 50% level will allow.

There are so many factors – bids, construction inflation, and such – that Braceras can’t say now which of the $1 billion in new road projects could be delayed.

For example, for fiscal 2019 (if the employee annual leave debt is NOT counted), the state would be just $7 million over the debt limit.

But in fiscal 2020 the state would be $33 million over budget. (Or $97 million and $123 million over the debt limit, respectively, if the annual leave debt is counted.)

Still, considering the enormous costs of road-building these days, such amounts “are not even a hiccup” in planned UDOT spending, noted House Majority Whip Frances Gibson, R-Mapleton.

But to keep Utah’s AAA bond rating, the highest given, conservative Republicans don’t want to cross the 50% debt limit line.

So starting Friday, UDOT bosses will begin some fancy financial footwork – with the promise that $1 billion in massive road construction projects will start flowing, all while keeping Utah below the Legislature’s self-imposed debt limit ceiling.