RALEIGH — Gov. Roy Cooper has proposed borrowing $350.7 million for state government structures and buildings in the University of North Carolina system.
Voters won’t have a say. These are limited obligation bonds that don’t require a vote. And for the second consecutive year, the debt package fails to fund repairs and maintenance needs for the state’s roads and bridges.
Unlike the limited obligation bonds in the governor’s package, general obligation bonds pledge the full faith and credit of the governing agency, and require a vote of the people.
The latest spending package comes less than one year after North Carolina voters approved a $2 billion Connect NC bond referendum, which included more than $1.3 billion in projects at UNC campuses and the state’s community colleges. Cooper’s bond package is split almost equally between the UNC system and state government buildings.
Several key lawmakers criticized the governor’s proposal.
“I don’t like bonds until you let people vote on them,” Brock said. “We’re not out of the woods on the rainy day fund, or the state pension plan, or the state health-care plan. We’ve got a lot of promises to keep before [Cooper] goes out and tries to use tax dollars and bond dollars to try to cement his re-election effort.”
Cooper brushed aside concerns about the need for voters to endorse the package during the March 1 press conference when he released his budget proposal and announced the bonds.
“Well you don’t need to in those kinds of limited obligation bonds,” Cooper said. “And I look forward to coming forward with some other efforts that would be general obligation bonds as we talk about infrastructure, as we talk about public schools. We’re going to need some additional help in that area. We thought it was important to get all of this in the budget, repair and renovation, the kind of things that we need to be doing.”
“I hesitate to be skeptical about it, but I thought we had taken care of UNC’s issues during the big bond package last year,” Torbett said. “I’m disappointed that we haven’t had the conversation about transportation.”
Torbett said that improving roads, bridges, and ports expand commercial activity and actually bring additional revenue to the state. “There’s no better return on the investment of the people’s dollars than through infrastructure,” he said. Torbett said that he is working with Cooper’s transportation secretary, Jim Trogdon, on ways to find more money for transportation projects.
The largest item in Cooper’s package would be $21.8 million to renovate the Legislative Office Building in Raleigh. The LOB, opened in 1982, houses some of the legislators’ offices, support staff, and committee meeting rooms.
The second largest expense is for the Administration Building, which opened in 1967 and is diagonally across from the LOB. The proposal would borrow $20 million for asbestos, roof, and safety renovations to the building. It houses many of state government’s administrative functions, including the budget office, the state’s human resources offices, the state property office, and the Division of Non-Public Education. The governor has an office there, and the governor’s press conference room is located there.
Cooper’s predecessor, former GOP Gov. Pat McCrory, has said the building was in disrepair and needed renovation.
Cooper invoked McCrory’s support for renovating state buildings in making the case for his bond proposal.
“I think the person who held this office before talked about the need for renovation and repair and investing in that and how that can save the state money in the long run,” Cooper said.
Cooper also said that it’s “fiscally prudent” to borrow the money now to pay for the renovations. “You won’t find a time where interest rates are lower,” Cooper said. “Construction costs aren’t going to go any lower.”
The top UNC system project expenses are $15.8 million to renovate Carver Hall at N.C. A&T State University in Greensboro; $15 million to renovate Page Hall at N.C. State University in Raleigh; and $15 million for a boiler replacement at Western Carolina University in Cullowhee. There is a bond project at all 16 UNC campuses, plus the N.C. School of Science and Mathematics, which is governed by UNC General Administration.
Brock acknowledges that many state buildings have legitimate need for repairs. But he prefers paying cash for the projects as needed rather than borrowing for them.
“There are some worthwhile projects in there,” Brock said. “That’s why I’d like to — instead of going out to bonds every time, I’ve always been a proponent of building up the R&R [Repair and Renovations] Fund.”
The state also needs to conduct a study and take inventory of its building and facility needs, Brock said. He noted that at one time, the state was leasing a downtown Raleigh office for $1 million a year. He said the office’s function was data entry.
“You can ship that [function] anywhere,” Brock said. “You can put it in Bertie County. … You don’t have to have it in prime real estate in the capital city.”
Brock said the state needs to become a better steward of tax dollars. He suggested looking outside of Raleigh and putting some state offices in Apex, Franklin County, or Mebane, where real estate is less expensive and property could be leased for less than it costs to do so in Raleigh.
Charlie Perusse, the state budget director, said the annual payment on the debt, once all the bonds are sold, would be about $28 million, roughly $8 million per $100 million borrowed, for the 15-year life of the bonds.