There are various ways to explain the difference between putting school bonds to voters or borrowing for school projects and paying it back through regular cash flow, but Wake County Commissioner Caroline Sullivan might have put it in the best perspective.
The choice of not going with a bond vote and choosing the borrowing route in Sullivan’s view came to this: “Looking at debt this way depoliticizes these bonds. We need to start looking at it more as a building program than a bond program.”
Limited-obligation bonds, the kind sold to finance the Wake Justice Center and expansion of the Hammond Road Detention Center (bonds approved in 2009), usually come with higher interest rates. General obligation bonds require commissioners to raise taxes to pay off the debt or get the voters to approve the borrowing.
Commissioners make no secret about why the limited obligation bonds are being considered for school projects: They want a half-cent sales tax referendum to fund a long-sought, much-delayed transit plan, and it might be difficult to get voters to approve school bonds and the transit tax boost. Both are worthy to be sure. But commissioners have to deal with political reality.
Their strategy seems sound. The county’s credit rating is just fine and could certainly handle any debt from school construction, which is a critical need in a growing county. And commissioners have the best chance now to gain support for the transit tax, which would modernize transportation plans to the point of adding trains and buses and perhaps multiply by four transit ridership in the county in a dozen years. That’s going to be vital if the county’s going to have a manageable plan that can flow with Orange and Durham counties, which are also modernizing transit.
The usual knee-jerk opponents of any tax increases, who somehow seem to believe that a growing county can run on air, will of course come to the fore when commissioners talk seriously of their plans. But the problem is that opponents have plenty of volume in their opposition but little substance.
Commissioners are looking at a viable option in pushing ahead with school projects without a bond referendum. The transit tax is an important priority that shouldn’t be jeopardized by confusion and politics.