Bond Issue
Definition
Government borrowing for major capital projects (roads, sewers, buildings) by selling bonds that investors purchase, receiving interest over 10-30 years. Bond issues allow governments to build expensive infrastructure immediately while spreading costs over the asset’s useful life. General obligation bonds require voter approval and are repaid through property taxes; revenue bonds are repaid through user fees (water, sewer) and don’t require voter approval. Bond interest costs taxpayers significantly over time.
Louisville Context
Louisville Metro regularly issues bonds for infrastructure: road construction, sewer improvements, parks facilities, and government buildings. Total Metro debt is approximately $1.8 billion with debt service (principal and interest payments) consuming approximately $150 million annually (15% of the budget). Large bond issues for MSD’s CSO fixes significantly increased debt and sewer rates. Future bond capacity is limited by existing debt levels.
Why It Matters
Bonds allow necessary infrastructure investment but commit future budgets to debt payments, limiting flexibility. When bonds fund economically questionable projects or benefit only certain neighborhoods, all taxpayers pay for decades through property taxes or sewer fees. Bond decisions require careful cost-benefit analysis ensuring investments serve broad community needs rather than narrow interests.
Dave’s Proposal
Dave will ensure bond-funded projects undergo rigorous cost-benefit analysis and equity review before approval. He’ll prioritize bonds for maintenance and underserved neighborhoods over new facilities in already well-served areas. He’ll make bond proposals transparent with clear explanations of costs, benefits, and taxpayer impact. He’ll avoid bonds for questionable economic development projects.