Runway extension costs: Short on details

In yet another of its “news” stories in the guise of
an editorial, the Erie Times News published an article
today on the progress of the airport runway extension,
currently estimated to cost $80.5 million, entitled
"Airport runway extension - 1st house torn down."
While wordy in length, it's short on pertinent details.

Reporters, as writers, are notoriously inherently
deficient in mathematics and finances. As a case in
point,the reporter who penned this story, quoting Erie
economic development director Bob Spaulding, wrote, in
part: "That means the county will not have to pay to
insure the ($21 million) bond issue. It will also
save on interest costs, he said."

A fiscally savvy reporter, an oxymoron, would have
asked the economic development guru he quoted the
next logical question: What did he mean when he
said "It will also save on interest costs."?

Revenue bonds which are repaid through revenue earned
by the project they are floated to finance are
substantially more expensive to float because of
much higher interest costs than general obligation bonds.

What are the life cycle financing costs of floating this
airport runway bond issue for a project which may not be
completed in years, and even then is never likely to
generate anywhere near the revenue necessary to pay
for its construction, amortization and life cycle
maintenance costs?

That means the payout will have to come, one way
or another, from general funds? In other words, how
much are taxpayers being asked to pay beyond the
face value of the bonds? And how about the huge
and inevitable project cost overruns? The devil
is in the details. It's a pig in a poke.

Not only don't we get the answer to the question,
we don't even get the question.