Senate Approves $126.25 Million General-Obligation Bond Package for University and State Projects

The Utah Senate voted to approve Senate Bill 2, a general-obligation bond authorization that would permit the state to issue debt to finance highway and capital projects, including expansions at the University of Utah.

Senator Evans, who presented the measure, said the bill "authorizes a hundred and $26,250,000 in general obligation highway bonds to be repaid over 15 years" and also authorizes debt for an expansion to the Huntsman Cancer Institute and University of Utah Hospital. He said some projects would be repaid through revenues and donations "and the university's tobacco settlement fund," and that student fees would fund debt service on some college student centers. The bill also authorizes debt tied to liquor store and DABC warehouse projects with repayment from sales revenue.

Supporters noted recent years of paying cash for buildings had saved interest costs. "Because we have not bonded for our buildings this last or this year, we saved over $25,000,000 in interest," Evans said, adding that the state placed roughly "$230,000,000 of state projects this year $230,000,000 without bonding." Opponents raised the trade-off between avoiding interest and the risk of inflation increasing future construction costs.

Under suspension of the rules, the Senate moved the bill for second and third reading and final passage. The clerk recorded 24 ayes, 1 no and 4 absent; President announced that Senate Bill 2 passed the Senate and will be sent to the House for further action.

The Senate debate focused on the scope of projects authorized, sources of repayment and the fiscal trade-offs of bonding versus paying cash. The next step is transmittal to the House for consideration there.