RALEIGH – If North Carolina policymakers want to improve the quality of the buildings and facilities on the state’s universities and community colleges, the last thing they should do is authorize another massive higher-education bond package.

In the Raleigh News & Observer’s Sunday cover story about maintenance problems in the University of North Carolina system, some officials expressed skepticism about the viability of a new bond package. But their concern was about the timing – holding a referendum in the middle of economic woes would risk invoking public disapproval.

That’s not the only argument against a new bond package, however. There are stronger ones.

A decade ago, state policymakers placed a $3.1 billion package of construction bonds for UNC and community colleges on the statewide ballot. At the time, higher-education leaders admitted that they had done a poor job of maintaining the extensive physical plant already on their campuses. They also argued that if voters said yes to the bonds, it wouldn’t raise the state’s taxes.

The bonds passed. Gobs of money went into the construction pipeline, enriching the contractors who helped finance the referendum campaign and resulting in a dramatic change in the look and feel of most of North Carolina’s public campuses.

But the fundamental problem wasn’t fixed. On campus, there continued to be a fascination with shiny new things – not just buildings but new research projects, academic programs, entertainment and recreational facilities, and huge increases in enrollment.

During good economic times and bad, UNC and many community colleges failed to set their priorities in favor of maintaining quality. The focus was on expanding quantity. Educationally, their policies continued to waste taxpayer money on remediating students at the front end and failing to graduate large percentages of them on the back end. Physically, their policies led to deteriorating classrooms, laboratories, and other facilities.

To reward those who have managed North Carolina’s higher-education bubble during the past two decades with more taxpayer money would be akin to the recent bailouts of mortgage lenders, insurers, and auto companies. It would constitute a transfer of resources from the efficient to the inefficient, from the prudent to the improvident, and from the far-sighted to the near-sighted.

It would perpetuate all the wrong incentives. When faced with a budget crunch, the managers of public agencies already have good reason to skimp on supplies and maintenance instead of personnel costs. Strong interest groups represent teachers, state employees, and government contractors. If managers can make their staff and vendors happy by deferring facility costs, and be reasonably certain that there’ll be a bond package in the future to take care of the backlog, they’ll do it.

The Perdue administration and the new General Assembly should kick off the tough budget deliberations of 2011 by giving the state’s higher-education leaders a clear message: we will no longer reward your poor management with promises of future bailouts.

Instead, we are going to reduce your annual per-student allotment to an affordable level and then cap it. We recognize that you have major needs for repair and renovation of your facilities. We suggest that you change your priorities, reducing some current programs and services in your operating budget so you can increase your capital budget. We also suggest that you approach your private donors, to whom you have been pitching all sorts of relatively unimportant causes in recent years, and ask them to help bring your classrooms and laboratories up to snuff.

It’s possible that, some years into the future, you might earn an increase in state funding if your remediation costs fall, your graduation rate rises, and the quality of your physical plant improves.

But don’t count on it.

Hood is president of the John Locke Foundation.