N.C. Senate gives first OK to $451M borrowing package
Posted June 2, 2010 10:56 p.m. EDT
Updated June 5, 2010 3:40 p.m. EDT
RALEIGH, N.C. — 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.