MARC CHASE: Living on a financial prayer no way to govern

2013-05-14T00:00:00Z 2013-05-14T12:41:05Z MARC CHASE: Living on a financial prayer no way to governMarc Chase marc.chase@nwi.com, (219) 662-5330 nwitimes.com
May 14, 2013 12:00 am  • 

The voice of fiscal conservatism is often lacking in Northwest Indiana forums, and I'm hoping to change that as I take on a twice-weekly column for The Times.

Before left-leaning folks tune me out, listen to my promise. I strive to be fair, tend to be fiscally conservative -- but I'm not close-minded. I keep my take on social issues largely to myself.

To the outside observer, Lake County Councilman Ted Bilski's fiscal pledge at a recent County Council workshop would have appeared refreshing. He vowed Thursday not to spend a dime of $15 million in borrowed money until the county has a known funding mechanism in place to repay the money.

One might be tempted to offer praise for Bilski's apparent desire to do the right thing. But the initial urge to congratulate quickly dissipates when two other realities are considered.

First, Lake County took the step of borrowing the $15 million to begin with -- before its officials had any firm plan for repayment of the loan. Apparently they were banking on the passage and survival of a local option income tax. The income tax survived a county commissioner's veto attempt Friday, but the tax as a funding source was far from a foregone conclusion when county officials borrowed the $15 million. They were living on a prayer.

Second, if they did start spending that loan money on the roads, health insurance, drainage projects and other things for which it was earmarked, it would have amounted to gross irresponsibility -- perhaps even misconduct -- by those county officials.

Why misconduct? It circles back to spending borrowed money without any plan or source for repayment, a big fiscal no-no.

Bilski, as the Lake County Council president, certainly took the right step in asking for deferrals of the various projects tied to the loan money. That's great.

But why was the county in this position to begin with?

County officials swore up and down they needed to borrow the $15 million from the financial market late last year to bridge the gap for needed county projects.

But the laws of finance dictate that if you don't repay loans, all sorts of additional financial trouble rains down.

In the world in which most of us reside, if you default on your car payment, you lose your car. Miss mortgage payments, and your house belongs to the bank.

Lake County leaders know this.

The revelation that much of the borrowed money was earmarked for operational expenses was bad enough in and of itself. Anyone who believes that borrowing money for everyday expenses is preferable to good old-fashioned cutting and living within one's means is destined for financial turmoil.

But taking out loan money without a firm plan for repayment? That just smacks of recklessness.

Investigative Editor Marc Chase can be reached at (219) 662-5330 or marc.chase@nwi.com. The opinions are the writer's.

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