MARC CHASE: Massive municipal debt should make us all queasy

2013-05-30T00:00:00Z MARC CHASE: Massive municipal debt should make us all queasyBy Marc Chase, (219) 66205330

Not all debt incurred by government is dangerous or irresponsible. Taking on debt for capital projects — including roads, needed building renovations and so on — with a clear and identified plan for repayment is an accepted practice of doing government business.

But local government borrowing massive heaps of money and using the taxpayers as collateral should give us all pause, and, frankly, make us queasy.

Veteran Times reporter Bill Dolan recently reported the heaps of cumulative debt faced by 19 cities and towns in Lake County is approaching $900 million. In fairness to the local government leaders making the financial decisions leading to the debt, what does that really mean?

In Hammond, which leads the Lake County pack with total obligations of $167.7 million, it means a little less than $2,100 in debt for each city resident recorded in the U.S. Census. It's not debt government leaders put on their own private credit cards. It's debt put on the municipal books, and public money is obligated for repayment one way or another.

Hammond officials argue a large chunk of this debt accrued because of the $40.3 million project to stop sewage overflows into the Grand Calumet River, an important project to be sure.

But should so much of local government's work be done on credit? Most lessons in fiscal responsibility say no. How many of us had parents who gave us our first pre-credit card ownership lesson by putting their glasses on the end of their noses and telling us not to rack up more debt than we could pay off on the monthly statement? It seems to be pretty sound advice.

In fairness to Hammond, our region's largest municipality, the biggest total debt load does not equal the highest amount of debt per resident in Lake County. State data concludes the much smaller city of Whiting, with about $41 million in debt, has $8,200 in debt for each resident.

Whiting Mayor Joe Stahura makes sound points that the state debt figure includes both principal and interest — and therefore is larger than the traditional loan figure most of us envision when we think of debt. The city also seems to have a firm plan in place to quickly repay much of this money.

But recasting the numbers in a different light does not take away the massive borrowing that has become commonplace to the operation of local government here. It's even more troubling when county government officials take out loans to cover everyday operational costs.

Let's hope our government leaders remember what happened to our economy a few short years ago following years of high-risk lending to homeowners who borrowed beyond their means. Sometimes the bottom drops out — and then what do you do?

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

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