Get projects going, Easley says

New buildings and renovations may go before the Council of State in January

RALEIGH -- Gov. Mike Easley wants to get a two-month head start on about $722 million in building projects to create jobs and take advantage of low interest rates.

Easley announced Wednesday that he will ask the Council of State, a panel of elected executive branch officials, to give the go-ahead in January to a list of projects that includes new buildings on university campuses, new space in prisons and renovation of the N.C. Zoo's polar bear exhibit.

The projects could lead to 26,000 new jobs and would pump millions of dollars into the state's economy, Easley said. The legislature had previously approved the projects, which were scheduled to go before the Council of State in March.

"North Carolina is holding her own in job creation, but we are not immune from national economic trends, which means we have to take aggressive steps to minimize any hardships," Easley, a Democrat, said in a news release.

The state has already seen revenue fall short by 5 percent this year, and economists and forecasters say the state's revenue shortfall could grow to $1.6 billion out of a $21.5 billion budget. Adding that shortfall to potential new expenses could leave a hole of $3 billion in next year's budget.

State Rep. Mickey Michaux, a Durham Democrat and key budget writer in the House, said that since the projects were already approved by the legislature, starting them early wouldn't change what the state expected to have to pay in debt payments.

"We've got the money. We set the money aside to do it," Michaux said. "What you're doing is providing employment for a whole lot of people who are losing jobs."

The projects will be financed through a mix of bonds that do not require voter approval. No interest or principal payments would be due for six months, said Charlie Perusse, the state budget director. The money would be borrowed a portion at a time so the state would be paying interest only on what it spends.

The Council of State meeting in January will be one of Easley's last official events as governor. Gov.-elect Beverly Perdue is to be sworn in four days after the meeting. She said on Wednesday that she supports Easley's plan.

"These projects matter because they create construction jobs in the short term at a time when private development has slowed and rates and labor costs are low," she said. "Done right, they add the roads, rail lines, labs and university buildings we need to spur growth in the long run and transition our economy."

Cherie Berry, the state labor commissioner and member of the Council of State, said she is concerned that Easley is rushing so much borrowing on his way out the door. The issue should be decided by the people who will have to deal with it for the next four years, she said. New buildings will require new maintenance costs, which could make it even tougher for the state to keep its budget balanced.

"This is his last hoorah," said Berry, a Republican. "The first rule of holes is: When you're in one, stop digging."