The state should help finance asbestos removal from Utah schools through a special bonding program, a state financial adviser suggested to an interim legislative subcommittee Wednesday.
D. Kent Michie, vice president of Smith Capital Markets, proposed to members of the capital facilities bonding subcommittee that the state create an "Asbestos Removal Bond Bank."Under Michie's proposal, the state would bond for the estimated $50 million removing asbestos from the state's schools would cost. Then the money would be lent to school districts to pay for the removal.
That way, Michie said, school districts could take advantage of the low interest rates the state's high bond rating enables it to offer. The loan would be paid back at the same interest rates that the state would return to bond purchasers.
Or, the state could opt to pay the $10 million or so in interest itself and make the loans to the school districts interest-free, Michie said. That would help ease the financial burden of asbestos removal, he said.
School districts have until Oct. 12 to submit a plan to the federal government detailing which buildings are tainted with the toxic substance and how it will be removed. If the deadline is not met, school districts face fines of $5,000 a day.
The state's school districts estimate that removing asbestos could cost as much as $50 million. Educators have asked that a portion of the state's $110 million surplus be used for the cleanup, but no money was proposed in Gov. Norm Bangerter's plan for spending the money.
Rep. R. Haze Hunter, subcommittee chairman and R-Cedar City, said that the proposal would be discussed in detail at the next subcommittee meeting, which has not yet been scheduled.
The subcommittee will also discuss state participation in the financing of the expansion of the Salt Palace and sending a resolution to Congress in support of extending legislation set to expire at the end of the year that allows the Utah Housing Finance Agency to bond for money to lend to home buyers.