House leaders unveiled portions of a $2.85 billion bond package at a Monday press conference, arguing that borrowing the money now to pay for projects would take advantage of low interest rates and likely avert anticipated increases in construction costs over time. Along with the $2.85 billion in borrowing, the House committed $1.3 billion for highway construction in a six-year, pay-as-you-go plan.
“Who in here thinks that the cost of construction is going to be lower than it is now?” Rep. Dean Arp, R-Union, asked rhetorically. “Who in here thinks that the cost of money is going to be cheaper than it is now?”
The House proposal would borrow $400 million for transportation projects, much less than the $1.4 billion Gov. Pat McCrory requested in his transportation bond package; the remaining $2.45 billion primarily would finance building projects.
Education would get a big chunk of the proposed bond money, with $889.6 million going to the UNC system, $500 million going to build and renovate public schools, and $300 million set aside for the state’s community college system.
The bond proposal would spend $195 million on agriculture projects, including $110 million for a veterinary, food, drug, and motor fuels lab in Wake County, along with $85 million for a Plant Sciences Building at N.C. State University.
It would spend $135 million for attractions, parks, and historic sites, including $24 million for exhibit complexes at the N.C. Zoo in Asheboro, and $10.8 million for a visitor’s center at the Battleship North Carolina in Wilmington. It also includes set asides for state parks across the state.
The bond plan would spend $75 million for water and sewer loan projects and $10 million in matching grants for parks for veterans and children with disabilities.
It would spend more than $92 million for National Guard armories and centers.
“Planning ahead for our future is a key Republican principle — not only a good Republican principle but a good North Carolina principle,” House Speaker Tim Moore, R-Cleveland said.
Noting that in recent years the state repaid more than $2.5 billion in debt to the federal government for unemployment insurance expenses, Moore said that the state has a “prime opportunity to invest in long-term capital growth.”
Moore argued that most North Carolinians would get behind the package.
“We believe that the public will be excited about this plan,” Arp said. “What this does is responsibly pay for things as you go — pay cash for certain things that we have revenue streams for, and at the same time minimize the amount of debt that we borrow.” He also said he expects the state to be able to maintain its high credit rating and pay off the bonds without having to raise taxes.
McCrory, in a press release, praised the plan.
“I applaud the House for listening to the people across our state who want to prepare North Carolina for the next generation,” McCrory said. “North Carolinians deserve a chance to express their voice on this issue in November. The Connect NC proposal provides commonsense, long-term solutions to strengthen our schools, roads, parks, public safety and quality of life. The House proposal aligns with our plan to invest in North Carolina with a prudent, conservative approach that takes advantage of historically low interest rates and doesn’t raise taxes.”
Senate leaders were noncommittal. Said Amy Auth, spokeswoman for Senate leader Phil Berger, R-Rockingham, “Senate Republicans have expressed interest in considering a bond proposal this session. They look forward to reviewing and discussing the House proposal.”
Last week, Senate Transportation Committee Co-Chairman Bill Rabon, R-Brunswick, said transportation projects could be financed using current tax revenues and no borrowing was needed. The Senate has been more receptive to issuing debt for building construction and renovation.
The bill is on Tuesday morning’s House Finance Committee calendar.
The proposal calls for placing the bond referendum on the ballot Nov. 3, at a time when many — but not all — municipalities will vote for mayors and town councils.
About 1,000 of the state’s 2,700 precincts, mostly the rural ones, have no election scheduled in November, so the referendum would impose additional costs to conduct in those precincts.
Barry Smith (@Barry_Smith) is an associate editor of Carolina Journal.