Va. gov makes hard sell on debt for transportation

RICHMOND, Va. — Virginia Gov. Bob McDonnell made a hard sell for his plan to borrow $3 billion for road construction to legislators wary of debt and a statewide television audience in his State of the Commonwealth address Wednesday night.

The second-year Republican argued that borrowing is the only way Virginia can take advantage of unusually low construction and interest rates.

The second-year Republican governor knows that his administration's centerpiece issue faces threats from the left and the right. Conservative groups averse to government debt and legislative Democrats have both rejected it as "borrow-and-spend" budgeting.

The 50-minute address, which was still being trimmed minutes before the broadcast began, was produced for television and aired statewide by the Virginia public broadcasting stations. McDonnell wants to eliminate the stations' $4 million in state funding.

The speech contained no new initiatives; all the measures he promoted have already been unveiled. Instead, he plugged several items that face difficult votes in a politically charged election year as Democrats battle to hold their slim two-seat Senate majority.

Having pledged not to increase taxes in a sluggish economy and shaky growth in state revenues, McDonnell focused on persuading legislators uncomfortable with debt to break with the government's "pay-as-you-go" heritage.

He noted that $1.8 billion in bonds backed solely by state revenues was approved in 2007, and that accelerating the sale of those bonds now would save taxpayers $7.5 million a year.

"Let me be emphatic about the fiscal prudence of accelerating these bonds now. Interest rates are at near all-time lows, and bids on construction are coming in at the lowest in the modern era," he said in the text of his speech. And every $100 million spent on construction would generate about 3,000 jobs.

He also noted that $1.1 billion of the borrowing would be backed by federal bonds.

McDonnell sought to comfort restive members of his own party who are concerned that added borrowing could cause Virginia's perfect bond rating to be downgraded for the first time. He said he traveled to New York last week with Democratic and Republican legislative leaders to discuss the bonding plans.

"The bond rating firms on Wall Street that give us our treasured Triple-A rating have no concerns about our bond plans whatsoever," he said.