Borrowing for Rural Road Projects Spread Out
The state legislature approved $325 million dollars worth of road improvement projects for rural areas of the state last year. The projects are slated to be completed over a three year span. The Department of Transportation announced on Friday evening that they’ll borrow the money in chunks, instead of all at once, as planned. Commissioner of Administration Kristy Nichols said in a statement that’s to relieve the state budget of baring the three-year fiscal load in one year.
But State Treasurer John Kennedy said borrowing money in stages doesn’t make financial sense.
“You’re gambling on the direction of interest rates," Kennedy said. "If interest rates go up, which means we can do fewer projects.”
Kennedy said that as the economy improves in the coming years, interest rates will increase.