Measures 70, 72: Yes

Today we begin examining the candidates and ballot measures in the Nov. 2 election and making our recommendations. The list is long — seven statewide ballot measures, three statewide offices, a congressional seat, four legislative races and a pair of county commissioner contests. So we'll ease into it and take the less contentious ones first.

Oregon lawmakers referred three measures to voters this year. Measure 70 would expand eligibility for low-interest home loans to military veterans, Measure 71 would allow annual sessions of the Legislature and Measure 72 would let the state borrow money for capital projects at a lower interest rate. We'll save the annual sessions question for another day and tackle 70 and 72.

Oregon has long offered home loans to veterans through the Oregon War Veterans' Fund, created in 1944. But restrictions on the program enshrined in the state Constitution leave out some modern-day veterans who ought to be eligible.

The Constitution requires a veteran to serve 210 consecutive days on active duty unless discharged for a service-related injury or unless the veteran saw combat. This leaves out veterans who served on active duty after the 9/11 terrorist attacks but were honorably discharged in less than 210 days.

The Constitution also requires a veteran to apply for a loan within 30 years of discharge. Many Vietnam-era veterans have been out of the service longer than 30 years but could benefit from a loan.

Measure 70 changes the length-of-service requirement to 178 consecutive days and eliminates the 30-year cutoff for applications, making this a lifetime benefit. Applicants still must show they can repay the loan.

This measure has no effect on the state budget because the loans are repaid. It extends a valuable benefit to those who served their country. We recommend a yes vote.

Measure 72 sounds alarming at first glance; it "authorizes exception to $50,000 state borrowing limit for state's real and personal property projects." But it doesn't actually open the doors to more borrowing. In fact, it authorizes no specific borrowing at all.

It does allow the state to get a better interest rate on money it borrows now and will continue to borrow to finance state projects. The Constitution limits state borrowing in excess of $50,000 with some exceptions. What this means in practice is, the state still borrows, but it does so by issuing certificates of participation, which carry a higher interest rate than general obligation bonds, which are backed by the state's general fund.

Measure 72 would allow the state to issue the lower-interest bonds to acquire, build, remodel, repair, equip or furnish state property, and to refinance existing certificates of participation at the lower interest rate.

The measure would save the state $5 million in interest for every $100 million borrowed. It prohibits the state from using property taxes to repay any borrowing, limits the total debt to 1 percent of the real market value of property in the state.

If the measure had been in place last year, the state would have saved $38 million in interest over the life of bonds issued that year.

We recommend a yes vote on Measure 72.

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