RALEIGH - Is there something in the water at the General Assembly? We now have a new $21.3 billion state budget that authorizes the University of North Carolina system to borrow a staggering $523 million to finance new building projects. What's worse than the hefty half-billion dollar price tag is that those responsible for footing the bill -- the taxpayers -- have no voice in deciding these projects.

Over the past few years there has been a noticeable shift in how state government finances UNC capital projects. In 2000, voters approved $2.5 billion in general obligation bonds to finance a flurry of higher education building projects. Since then, however, the legislature has opted to finance the overwhelming majority of new UNC construction with Certificates of Participation (COPs).

Unlike general obligation bonds, COPs financing is not subject to the outcome of voter-approved referendums.

While politicians and bureaucrats may like COPs, there are plenty of reasons why the general public -- those who actually pay the bills -- should feel differently.

COPs are not backed by the full faith and credit of the state. Therefore, the interest rate is usually higher, leading to higher project costs.

Because COPs are tax-exempt, universities are limited in how buildings can be used.

Most important, COPs in effect ignore the constitutional provision that makes citizens the final arbiters of how much debt government incurs. COPs allow campuses to proceed with building projects while taxpayers are reduced to the role of bystanders.

Politicians defend the borrowing binge by saying the state will actually save money and put people to work. Construction workers will have jobs again. Wages will generate tax money. And project costs will certainly be less now than in the future. Furthermore, proponents say the additional borrowing is within the guidelines of the state debt affordability model.

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THIS IS NONSENSE. First, it's wrongheaded for legislative leaders to view UNC capital projects as a giant public jobs program. It's not possible to spend your way out of a recession. COPs burden future taxpayers and limit the flexibility of state and local governments.

Second, the debt affordability model assumes a 3 percent growth rate, a target that will likely be difficult to reach this year in a state with 5.8 percent unemployment. Legislative leaders know the realities. That's why they included the Two-Thirds Bonds Act of 2008 in this year's state budget.

This legislation allows the state to borrow up to two-thirds the amount of retired state debt from the previous year through the issuance of general obligation bonds -- all without voter approval. This year it amounts to about $100 million worth of wiggle room. Next year maybe more.

There are many reasons why taxpayers should be mad. Over the past six years, legislators have tallied approximately $1.6 billion in COPs debt for UNC building projects. Total COPs debt has gone from just $17.5 million in 2003 to $727.6 million in 2007. These trends have helped increase per capita debt in North Carolina from $320 in 2000 to $768 in 2007, an increase of 140 percent.

State Treasurer Richard Moore has more than once cautioned the state about over reliance on certificates of participation and their impact on general obligation debt. Earlier this year Moore warned that without a change in policy, continued dependence on COPs is certain to jeopardize the state's bond rating and make borrowing more expensive.

As a public institution, UNC deserves our support. However, there is something fundamentally wrong when lawmakers ask taxpayers to provide billions to support the system yet take away the public's voice on questions regarding the acquisition of billions in public debt.

Our state constitution stipulates that public debt should not be considered without a vote of the public. COPs violate this principle and undermine public trust. It is time for the legislature to end its over-reliance on COPs and return to more sound principles for financing UNC capital projects.

(Robert Luebke is senior education policy analyst at the Civitas Institute.)