NC House wants to borrow $3.1 billion for construction projects. Will Senate agree?
Updated June 23
North Carolina voters are a step closer toward being asked in November to approve borrowing $3.1 billion to pay for school and road construction projects.
The state House voted 113-4 on Thursday to put a $1.95 billion school construction bond referendum and a $1.15 billion road projects bond referendum on the November ballot. Supporters said the time to act is now because interest rates are low, infrastructure needs are great and inaction could result in transportation projects coming to a halt.
“It is a step forward to get some key and critical projects moving in the state,” House Speaker Tim Moore, one of the bill’s primary sponsors, said at Thursday’s House Finance Committee meeting. “Is it perfect? No it’s not perfect.
“I’m waiting to find the perfect bill. But I think it’s important that we send a message that we believe in this continued investment.”
In a final vote on Monday, the House voted 113-5 to approve House Bill 1225 and send it to the Senate, where support for the legislation is uncertain. Last year, the House passed a bill to put a $1.9 billion statewide school construction bond referendum on the ballot but it stalled in the Senate.
“We won’t know until we get it there,” Moore said.
School and road construction needs
The bill comes as North Carolina school districts have identified $8 billion in construction needs. The bill would provide $1.05 million to K-12 schools, $600 million to UNC System schools and $300 million to community colleges.
Pitt County lawmakers focused on how the bill includes $172 million for the new Brody School of Medicine Building at East Carolina University.
“This bill will improve North Carolina’s educational and transportation infrastructure, including the vitally important new facility for the Brody School of Medicine,” said Rep. Perrin Jones, a Pitt County Republican. “This new facility is something that the people of Greenville, Pitt County and really the rest of Eastern North Carolina have worked on for the better part of a decade.”
The state Department of Transportation has less cash in its accounts than required under state law, meaning it can’t enter new contracts for supplies and equipment or begin new highway projects, the News & Observer has reported.
DOT, which would get the $1.15 billion in road money, is furloughing thousands of employees due to a drop in revenue. The state could see a $774 million drop in the Highway Fund and Highway Trust Fund.
“If we don’t find a way to invest in development and maintenance of this critical transportation infrastructure, our state will suffer,” Moore said. “We will not be able to support the continued growth that we have. It’s just a reality.”
Moore said that DOT wouldn’t get the money until it can show its financial house is in order. A bill making its way through the General Assembly would put DOT under more financial oversight.
Moore said the state can afford to borrow $3.1 billion and that Interest rates are so low now and that “it is the time to leverage debt to engage in projects.”
The House approved an amendment from Rep. Wesley Harris, a Mecklenburg County Democrat, to reduce the road bond funding by $350 million to give $250 million more for K-12 projects and $100 million more for community college projects.
“We have a great deal of infrastructure needs in our state that we need to find a way to fund and while I understand the importance of investing in our transportation system, there is no greater return on investment than investing in education,” Harris said on his amendment.
Last year’s school bond proposal
Instead of a bond referendum, the Republican-led General Assembly passed a state budget last year that they said called for committing $4.4 billion over the next 10 years for construction projects for K-12 schools, community colleges and universities. The money would come from the State Capital Infrastructure Fund and not from issuing construction bonds.
Democratic Gov. Roy Cooper vetoed the budget due to the lack of Medicaid expansion and what he said were insufficient raises for teachers.
Cooper originally called for a $3.9 billion school construction bond referendum to be put on the ballot. As a compromise, he has proposed asking voters to approve a smaller $3.5 billion bond referendum.
This story was originally published June 18, 2020 at 6:23 PM.
