Should NC borrow $1.9 billion for school construction? School boards, counties propose bond

Voters could be asked to borrow $1.9 billion for statewide school construction needs next year under a proposal presented Tuesday by groups representing county commissioners and school boards.

The N.C. School Boards Association and N.C. Association of County Commissioners appeared before a House budget committee Tuesday to ask for help funding nearly $8 billion in expected school construction needs over the next five years.

The groups want to see a school construction bond on the ballot in 2018 – the first such referendum statewide since 1996. “We’re looking for a one-time infusion of cash by a statewide bond,” said Richard Bostic, a lobbyist for the School Boards Association.

Rural counties have been struggling to fund new schools through property-tax revenues, and some now have aging school buildings in poor condition.

If the legislature agrees to the bond proposal, the school board and county commissioners groups suggest that bond money could be allocated to districts using multiple criteria: Total number of students, poverty level of the district and size of the county. So while all counties would benefit, counties struggling to build schools could get a larger share. Counties could also be required to provide local match.

Bostic said state government can afford to borrow the money based on a recent debt affordability study conducted by the state treasurer’s office.

Rep. Jon Hardister, a Greensboro Republican who chaired Tuesday’s House budget committee meeting, said budget writers haven’t yet discussed the bond proposal.

“I think it’s something we should look at, but I’m not ready to commit to it because I need to study the details,” he said.

Rep. Amos Quick, a Greensboro Democrat and former school board member, said he’s seen firsthand the need to replace old school facilities in Guilford County. “There are at least three schools that were built in 1927,” he said. “You can imagine with something built in 1927, the struggles we have with those buildings.”

The proposed bond isn’t the only potential source of school construction money that the school boards and county commissioners groups want legislators to consider.

The groups also voiced support for legislation that would allow counties to raise local sales taxes for school construction.

One option – already included in a bill filed by House Republicans – would allow counties that don’t have a sales tax for transit funding to instead have a quarter-cent or half-cent tax for schools.

“This does not take away the transit authority, but it would allow the other 94 (counties) to use it,” said Johanna Reese of the Association of County Commissioners.

Under the proposal, counties could also increase an existing optional quarter-cent tax to a half-cent tax. The increase would require voter approval.

County commissioners and school boards also want the legislature to direct more revenue from the N.C. Education Lottery to school construction.

Some counties have gotten a boost for school construction in recent budgets, but the funding hasn’t been spread across the state.

In 2015, Senate Majority Leader Harry Brown, a budget writer, added $10.96 million to the state budget for a new middle and high school in Jones County, which is one of the state’s poorest and is part of Brown’s district.

Brown has also backed another approach for helping rural school districts raise money for school construction: Shifting sales tax revenues that would go to urban retail centers under current formulas. Last month, Brown filed another bill to change the tax distribution formula, but it hasn’t yet received a committee hearing.

This story was originally published March 28, 2017 at 8:34 PM with the headline "Should NC borrow $1.9 billion for school construction? School boards, counties propose bond."