Easley to stimulate economy with building projects
Posted November 26, 2008 2:17 p.m. EST
Updated November 26, 2008 8:21 p.m. EST
RALEIGH, N.C. — 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."