$3.1B bond package gets initial OK in House
The House gave preliminary approval Thursday to putting a $3.1 billion bond referendum before voters this November.Posted — Updated
A final vote is set for Monday night after the initial 113-4 vote in favor.
About $1.15 billion would go to the state Department of Transportation for operational expenses like maintenance, as well as projects that are already approved in the Strategic Transportation and Infrastructure Plan.
The remaining $1.95 billion would be divided among universities ($600 million), community colleges ($300 million) and local K-12 school districts ($1.05 billion) for construction and repair needs. The formula for local districts would be based on enrollment but would be weighted to favor smaller or more rural counties with less robust tax bases on which to draw. Every district would be guaranteed $5 million.
At a House Finance committee meeting Thursday morning, House Speaker Tim Moore, the sponsor of House Bill 1225, said he was told by State Treasurer Dale Folwell that the state could afford to borrow up to $3.16 billion in general obligation debt. The total proposal comes in just under that.
That amount of debt is generating some heartburn among the more conservative members of the House Republican caucus. It’s been only four years since the state’s voters approved the last general-obligation debt, the $2 billion “Connect NC” bond package.
“Before the DOT can issue those bonds, they’re going to have to have their financial house in order to have those things done,” he said.
House Transportation Chairman Rep John Torbett, another supporter, said the debt total would be issued over the course of five years, and each year’s issuance would be divided between education and the DOT.
“Please understand that, if the voters pass this in November, that the day after the election, nobody gets a check for $1.5 billion,” said Torbett, R-Gaston. “That’s not how it’s done.”
Moore said a bond is "better than any gas tax or anything" to fund current transportation needs.
“Right now, interest is cheap. You’re almost getting paid to take money right now,” he said. “It is the best time to leverage debt to engage in projects.”
"Without the availability of bond money at this juncture, projects will cease, orange barrels will go away. The orange cones will go away," Torbett warned. "I'm not trying to scare you. I'm trying to be as factual as I possibly can. There is no new revenue. This body has not decided to raise revenue."
Community colleges could use the funding for a centralized IT system, repairs and renovations and to develop and expand facilities like advanced manufacturing training.
Universities could use the funding for projects prioritized by the UNC Board of Governors, for repairs or to finish financing projects for which they’ve already raised matching funds from donors.
Moore said one such project is the UNC School of Nursing, where the need for asbestos remediation has left much of the office space unusable.
“For every dollar in public money in there, you’re getting a dollar of private money,” Moore said. “That’s huge.”
Senate leaders are already signaling a chilly welcome for teh plan, however.
The Senate has long opposed general obligation borrowing, preferring pay-as-you-go programs, and Sen. Ralph Hise, R-Mitchell, said Thursday that that hasn't changed.
Copyright 2023 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.