Local Politics

N.C. Senate gives first OK to $451M borrowing package

Posted June 2, 2010
Updated June 5, 2010

— The North Carolina Senate voted Wednesday in favor of borrowing $451 million for construction and equipment purchases in state government and on college campuses.

The proposed $450.9 million package, which wouldn't require statewide voter approval like traditional bonds, would set aside $161.5 million for North Carolina State University's fourth engineering building on the Centennial Campus and $104.4 million to A&T State University to replace the current McNair Building on the Greensboro campus.

N.C. State University Chancellor Randy Woodson said the new building could help make the school's engineering program one of the nation's elite.

“We’re (already) the fourth largest engineering program in the country,” Woodson said.

The chancellor said new facilities help attract the best facility, recruit the best students and support industries.

"New buildings increase your capacity to do innovative research because of the new facilities, new equipment," Woodson explained.

However, those against the package say it is irresponsible to borrow when the state could face a $3 billion shortfall next year.

Senate Minority Leader Phil Berger, R-Rockingham, opposes the bill.

“I don't think it is the right thing for us to do for the taxpayers,” he said.

The bill also sets aside $130 million for repairs and renovations to state and university buildings and $55 million to buy equipment for community colleges and University of North Carolina system campuses. Berger said the money is slated for worthy projects but the timing is not right because of revenue shortfalls.

“That is the kind of thinking that led the state into the fiscal situation we have got now,” he said.

But one of the primary bill sponsors, GOP Sen. Richard Stevens of Wake County, said he wants to take advantage of discounted construction costs and low rates. He said by making this long term investment, the state will not lose its top-level bond rating.

“I would have liked to have bought a house without a mortgage. A lot of people like to buy a car without taking out a car payment. You would like to be able to do that. Sometimes you can't. Sometimes you take out a little debt in order to move ahead,” Stevens said.

North Carolina is one of seven states with the triple-A bond rating. The state could save up to 30 percent on construction cost as interest rates remain low and contractors are looking for work, said Sen. Tony Foriest, D-Alamance, the other primary sponsor.

The bill requires one more vote before it moves to the House. However, House Speaker Joe Hackney, D-Orange, said there isn't as much support in the House for the bill as there is in the Senate.

17 Comments

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  • gordonbabe Jun 3, 2010

    Well why not? Aren't we made of money now? Easley's Education Lottery will pay it all back won't it?

  • blackdog Jun 3, 2010

    Richard Stevens is the only member of the GOP who understands what fiscal responsibility entails. Are you sure he is a republican ????

  • moth Jun 3, 2010

    If Richard Stevens thinks that 450 million is "a little debt",I shudder to think what he considers to be REAL borrowing. We may resemble California soon.

  • ifcdirector Jun 3, 2010

    Richard Stevens needs to go.

  • mep Jun 3, 2010

    It appears our State govt is getting it's financial ideas from the Federal govt.... borrow more so you can spend more. Yes it will cost more if we wait, but our officials need to face the fact WE ARE BROKE! At my house, that means we stop spending. But hey, if I were spending someone else's money... why would I care? VOTE THEM ALL OUT!!!!

  • Bob3425 Jun 3, 2010

    November is coming, VOTE THEM OUT.

  • ORMA Jun 3, 2010

    I work for the community college system and I would LOVE to have some new equipment to work with but now is NOT the time to be trying to get some. The state should NOT be going deeper into debt when they can't manage the current budget. Talk about a textbook case of fiscal irresponsibility. I think it is time for the voters of NC to rise up and vote these clowns out of office. We need common sense in Raleigh, not the same old same old that has put the state on a track toward bankruptcy.

  • asdfg Jun 3, 2010

    “I would have liked to have bought a house without a mortgage. A lot of people like to buy car without taking out a car payment. You would like to be able to do that. Sometimes you can't. Sometimes you take out a little debt in order to move ahead,” Stevens said.

    But I don't go buy a bigger and better house by borrowing money when I'm expecting my salary to be cut unless I can cut my expenses elsewhere first or have a large savings account built up.

  • wayneboyd Jun 3, 2010

    Miketroll calm down .... the state is hiring everyday these folks pay taxes, so your legislators aren't concerned about repaying. LOL

  • SaveEnergyMan Jun 3, 2010

    The time to buy/build a new dream house is not when the family finances are bad. I am familiar with both the NCSU and A&T Engineering colleges and both can wait a year or two for this to occur.

    If the money were to be invested into making the campuses more efficient - lowering operating costs through energy/water/maintenance, then an argument could be made. Financing over 20 years what would payback in 5 years means a net positive cash flow (savings > loan payment). Otherwise, it's simply crazy.

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