The left-leaning Budget & Tax Center is not often in agreement with the Republican leadership in state government. But it is joining the bipartisan support for the bond measure on the primary election ballot next month.
The center issued a report Monday saying voter approval of the proposed $2 billion debt would result in tangible benefits for the state, both long- and short-term. However, getting the full impact of the borrowing package, the report says, will require additional funding in the years to come.
The bond proposal would replace and improve infrastructure at universities and community colleges, state parks and the zoo, National Guard and water and sewer projects.
The report estimates that 5,000 jobs each year over five years would be created, and that almost $1 billion in employee income would be generated. In addition to construction, industries that add jobs include architecture and engineering, food service, real estate, wholesale trade, stores, truck transportation, auto repair and structural product manufacturing.
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The report gives credence to the bond supporters’ claims that this would be a smart time to borrow, since interest rates are at an all-time low, potentially saving hundreds of millions of dollars over the 20-year repayment, compared to issuing bonds under more normal conditions.
With years of budget cuts, a recession and an increasing population — North Carolina is now the ninth largest state in the county — the need to repair and renovate has never been greater, the report says. The state is investing a smaller share of the economy in infrastructure than it once did, the report says.
The report doesn’t address Gov. Pat McCrory’s claim that replaying the debt will not require an increase in taxes. But it predicts that the indebtedness, if approved, “will cast a long fiscal shadow,” with yearly payments of up to $200 million. Getting full use out of the bonds will require state leaders approve additional funding in the years ahead.
In other words, a zoo without animals, an engineering building without engineers, or public safety training facilities without new officers won’t generate the full potential of this economic boost, as the report puts it.
“It’s hard to see how we can fully utilize the new facilities that would be built without raising additional revenue or cutting important services elsewhere,” Patrick McHugh, the report’s author, said in an email.
The report urges the legislature not to sacrifice other projects to pay for the bond, but to commit to long-term funding.
The N.C. Budget & Tax Center is a research organization that advocates for the needy.