CAUTION DUE ON INCREASING PUBLIC DEBT

A recent article by Southeast Missourian writer Jack Stapleton reported that outstanding public debt owed by Missouri governmental entities has increased to nearly $15 billion. This figure includes statewide general obligation bond issues as well as indebtedness incurred by cities and school districts. According to figures compiled by the Committee on Legislative Research's Oversight Division, the total of public bonded indebtedness is now $14.7 billion, which includes both outstanding principal and interest.

The largest share of state government indebtedness is found in three general-obligation bond issues totaling more than $1.5 billion. These issues were approved by voters in 1973, 1982 and 1994. The first authorized the issuance of $400 million in water-pollution control bonds. As of last June, taxpayers had retired $100 million of the principal and had paid interest of $215 million.

The 1982 issue won narrow voter approval in 1982 and authorized $600 million for construction of new state buildings. As of the last payment date, principal paid totaled $161.8 million and interest paid was $424.7 million. This was the bond issue that provided the state's share of our local Show Me Center, with the balance of $5 million coming from a general obligation bond issue passed by voters in Cape Girardeau.

The third general-obligation bond issue was again narrowly approved by voters in 1994 and authorized $250 million. Proceeds went to new state office buildings and state facilities. This included more than $12 million for the Dempster Hall of Business at Southeast Missouri State University. At most recent report, the state had retired $2.9 million of principal and paid $12.1 million in interest.

It isn't clear that Missouri's outstanding bonded debt is in any way out of hand at this point. Nationally respected bonding agencies that are in the business of rating the quality of debt continue to give Missouri the highest marks of any state. Nonetheless, the huge interest expense, as compared with the puny amounts of principal retired -- even after 15 or 25 years -- amount to one large cautionary note. Debt is a useful tool in funding capital projects, but it can and often does get out of hand. It is up to all officials of state government to ensure that this doesn't happen.