State News

Easley to stimulate economy with building projects

Posted November 26, 2008

— North Carolina State University would get $109.1 million for a new library, and the state zoo would get $2.7 million to renovate its polar bear exhibit under a plan announced Wednesday to fast-track more than $722 million in capital improvement projects.

Gov. Mike Easley made the announcement, saying the move would create nearly 26,000 jobs and help stimulate the state's economy during the national financial crisis.

Another $109 million would go toward capital improvement projects at the Department of Correction for minimum-security prisons and a new women's health and mental health facility.

The University of North Carolina system would receive nearly $480 million, including $69 million for a dental school at East Carolina University and $24.5 million for a nursing school at North Carolina Central University. (View a list of the projects.)

Easley has also instructed Commerce Secretary Jim Fain to be aggressive with job recruitment, saying the state can use its incentive programs to create future jobs.

The governor expects to make several new job announcements soon, according to a news release from the governor's office.

“North Carolina is holding her own in job creation, but we are not immune from national economic trends, which means we have to take aggressive steps to minimize any hardships,” Easley said.

“When the new president and Congress pass an economic stimulus package early next year, I want to make sure North Carolina is immediately ready to take advantage of it.”

Easley will put the changes on the Council of State’s Jan. 6 agenda for approval – four days before Governor-elect Bev Perdue takes office.
Perdue issued a statement Wednesday afternoon saying that part of her plan for economic recovery includes similar spending to bring the right projects to construction quickly.

"These projects matter because they create construction jobs in the short term at a time when private development has slowed and rates and labor costs are low," Perdue said.

She did not specifically address the projects Easley has proposed.

Easley said that going to the market with the projects now is cost-effective since interest rates and building costs are lower.

Economists estimate that for each dollar spent on a construction project, $2.28 is pumped into the state’s economy and that every $1 million spent on a project results in 36 new jobs, the governor's office said.

The announcement comes the same day that President-elect Obama announced former Federal Reserve Chairman Paul Volcker as head of a new White House panel to help create jobs and bring stability to the struggling financial system.

In his third speech in as many days, Obama pledged to have an economic plan ready for action to deal with the financial crisis on his first day in office.

Wednesday's announcement marks a shift from Easley's mandate earlier this year for state agencies to cut spending by 5 percent to locate up to $1.2 billion the state will need to cover any shortfall.

Revenues have been about 95 percent of what lawmakers had projected when they drew up the state budget, and General Assembly financial experts have told lawmakers the budget shortfall could range between $800 million to $1.6 billion by the time the fiscal year ends next June.

Easley's change underscores concerns about North Carolina jobs. The state's unemployment rate climbed to 7 percent in October, the highest in almost six years.

Mike Walden, an economist and professor at North Carolina State University, said Easley's ideas are similar to those pushed by President-elect Barack Obama at the federal level.

"The advantage is that if the private sector isn't spending money, then you can have the public sector fill that gap," Walden said. "You are funneling money into the economy, stimulating the economy and creating jobs."


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  • BULLDOZER Nov 28, 2008

    "if you don't understand basic economic principles you shouldn't be commenting", one poster admonishes. Sir, it is the government that does not understand these principles. They have broken these basic rules so long that most Americans(taxpayers) have begun to think they can spend money they do not have. This country will be fine in the end, but the majority of Americans and the government need to learn fiscal responsibility. You don't initiate a 1 billion dollar jobs program when tax revenue is down and will stay down for next year and there is impending 2+ Billion dollar budget shortfall. You make massive cuts in spending first, THEN you invest in the state's infrastructure, not BEFORE. That's the way people with money keep and make their money.

  • superman Nov 27, 2008

    I live in a small subdivision. Our street has never been resurfaced in the 35 years I have lived here. They didnt have the money when they had the money and now that they dont have the money-- still no hope that I will ever live long enough to see our street resurfaced. If they want to stimulate the economy-- reduce taxes and give the money to the taxpayers-- they can spend the money for things they need.

  • fl2nc2ca2md2nc Nov 27, 2008

    I thought the State was having a Budget shortfall. Where is the money coming from?

    Exactly the question I had wolfpackfan2, exactly the question everyone should have...

  • wolfpackfan2 Nov 27, 2008

    Another point - why is Easley doing this? Shouldn't it have been left up to the next Governor? But then Easley has always been about making himself look good. It bugs me to death whenever we have a crisis of some sort (hurricane, tornado, budget shortfall, etc.), the first face we see is his face. I would much rather hear from someone who really knows what is going on than some politician trying to make himself look good.

  • wolfpackfan2 Nov 27, 2008

    I thought the State was having a Budget shortfall. Where is the money coming from?

  • thinkb4youspeak Nov 27, 2008

    Well said Awake. If the rest of you don't get basic economic principles, you shouldn't be commenting.

    State government is nothing like your family, and to compare its spending to you building a deck is ludicrous. Unemployment is up, markets are down, spending is down. What do you propose we do to fix it? Wait? Wait until unemployment hits 13, 15, 18, 20%?

    If people aren't working, they can't spend. If they can't spend, companies don't get revenue. If companies don't get revenue, they go out of business. If companies go out of business, people aren't working. See above.

    By government's investing in infrastructure, we get improved infrastructure that will help us compete in the future, as well as $ being pumped into the economy. The $ spent by the State will go to local companies that can hire local labor who will spend at the local grocery, pharmacy, mall, restaurants, etc. Then all those things can be taxed to pay for the infrastructure, plus people have jobs. Happy T-day

  • getrealpeople Nov 27, 2008

    It's easy or Easley to spend the taxpayers money. These projects were already in progress and his trip uh vacation on us suckers is almost over.. Watch for the fees on the working class from bev to pay for her spending... Tax the rich you believe that!!! ha just watch. registration fees on cars up and gas tax up....

  • rdcress Nov 27, 2008

    BRILLIANT! Great first step. Next step: Tax us into prosperity! Major overspending by NC government, 21st Century Commission proposing an additional $1 billion a year increase for 10 years in transportation related taxes. Might as well get to work on that perpetual motion machine while we're at it!

  • BULLDOZER Nov 27, 2008

    Aren't we heading into a budget shortfall to about 2 Billion?? In my family when money is tight we don't decide to paint the house or add on a deck. Seems to me government needs a little straightening up!!

  • ECU4lyf Nov 27, 2008

    this man couldn't stimulate growth in a petri dish