Frequently Asked Questions

 

Virginia's 2002 Higher Education

Bond Referendum

 

Q. Will these bonds raise our taxes?

A.  NO.  Within the context of the overall state budget, the annual payback is so small that no tax increase is necessary to make the payments.

 

Q. Will tuition & fees go up as a result of the bonds?

A.  NO.  Tuition and fees will not be used to repay the bonds. 

 

Q. Is this referendum connected to other questions on this fall's ballot?

A.  NO.  Voters statewide will be asked to approve issuing $900 million in bonds for higher education.  A separate question will ask approval of $119 million in bonds for parks and natural areas.  In addition, voters in Northern Virginia and Hampton Roads will be asked whether they support raising their sales tax to finance transportation improvements.  Voters may vote for or against each individual measure as they choose.

 

Q. Who decides what the money will be used for?

A.  The 2002 General Assembly approved a list of specific projects for which this bond package will be used.  Those projects are listed in state law.  Every college, university, and community college in every part of Virginia will benefit.  By law, the money may not be used for anything else.

 

Q. How can we be sure that the money won't be used for something else?

A.  By law, the money can only be used for projects listed in the 2002 bond legislation.  In fact, projects must stay within budget or the institution themselves will have to find the necessary additional funds.

 

Q. Will this bond issue hurt Virginia's triple-A bond rating?

A.  NO.  In fact, studies show that that bonds can actually enhance our AAA rating.  Virginia is one of only eight states in the nation with that rating.

 

Q. Will these projects have an impact in the current recession?

A.  YES.  These bonds will create thousands of jobs in the construction industry alone.  The planning for many of these projects is already complete and construction will start immediately after the bonds are issued.  This bond package will generate more than $1.5 billion in economic activity by 2008, and it will create nearly 14,000 new jobs.

 

Q. No one in my family is in college.  How will this benefit me?

A.  This will help strengthen Virginia's economy overall.  The package will help Virginia maintain and grow the conditions that keep our economy strong.  The fact is that companies want to locate or expand near colleges and universities so that they can take advantage of a well-trained workforce.  

 

Q. Will this affect private colleges and universities in Virginia?

A.  NO.  This applies only to public colleges, universities, and community colleges. 

 

Q. Why should we borrow money?
     Why don't we stick to Virginia's pay-as-you-go philosophy?

A.  This plan allows us to make critical investments now.  The economic conditions are right, and this proposal is conservative.  Virginia has two assets that put us ahead of our competitors: one of the best credit ratings in the country, and ample debt capacity.  Passage still will leave Virginia well below its capacity to repay debt.  And with interest rates so low, it makes sense to capitalize on these assets.  Consistent with Virginia's fiscally conservative philosophy, this bond issue is prudent, reasonable, and responsible. 

 

Q. Has Virginia ever issued bonds like this before?

A.  YES.  This only the fourth time in Virginia history that a general obligation bond has even been placed on the ballot.  The last time was in 1992 - a decade ago.  Since then our neighboring states of North Carolina and Maryland have both undertaken major bond issues to invest in their campus buildings.  In today's increasingly competitive world, Virginia cannot afford to sit back and rest on its laurels - or rest on our prior investments - without losing ground.