Debt spending on roads bill speeds to Cooper
A proposal that would allow the state treasurer to issue up to $3 billion in debt to tackle additional road projects cleared the House on Tuesday and was headed to Gov. Roy Cooper.Posted — Updated
Senate Bill 758 would let the state issue up to $300 million a year in special indebtedness, paid back in later years by the state's Highway Trust Fund. Because it's not tied to the state's general fund, the debt wouldn't have to be approved by voters.
The total payback cost, including interest, based on predictions from the General Assembly's fiscal research office, would be about $4.7 billion. That assumes the maximum of $300 million in debt is issued for each of 10 years and that the borrowing comes with a 15-year maturity and at 6 percent interest.
Rep. John Torbett, R-Gaston, said North Carolina's existing system of paying for road construction is aging and beginning to falter. The special indebtedness would help bridge the gap until a new funding model is developed, preventing a bust-boom cycle for contractors.
"What's happening to us today is we've got a whole lot more projects after the money runs out," Torbett said. "This pulls us out from behind the eight-ball and puts us at least beside the eight-ball."
Projects would be selected through the state's Strategic Transportation Investments program, which ranks projects by need. The bill focuses on regional and district level projects, which Torbett said should benefit rural North Carolina.
"The money's ... going to hit that connectivity piece, to make it easier to connect from metropolitan to rural," he said. "It's going to make it more available for economic opportunities away from the metropolitan areas."
The proposal requires the treasurer to sign off on the debt, and the Department of Transportation can access the money only if it has limited funds on hand.
State Treasurer Dale Folwell has called for a referendum to get taxpayers to sign off on the debt, and several conservative House members also said they dislike the idea of the state taking on more debt without voter approval.
"It's just a sad day for me that we're going to the extent of $3 billion, and we're saying we don't need the people to weigh in," said Rep. John Blust, R-Guilford. "We ought to do this in the right way, the constitutional way, and stay in the middle of the field and not run to the sidelines."
"If we've got $200 [million] or $300 million a year that we can pull out of the trust fund to make the payments to pay this back," said Rep. Michael Speciale, R-Craven, "why aren't we using that money on the roads?
"I just don't think this is the right answer, I don't think this is the way to do it, and I do think the people of North Carolina do have a right if we're going to commit them to $3 billion in spending," Speciale said.
Following the House's 94-21 vote in favor of the bill, Cooper spokesman Ford Porter indicated the governor will likely sign the measure into law.
"Infrastructure is the backbone of our economy, and Build NC will help North Carolina stay competitive," Porter said in a statement. "This valuable resource will help build roads across the state so we can create more jobs and make it easier for people to get to work and take care of their families."
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