State Politics

NC House panel backs $2.8 billion bond vote for infrastructure and roads

Rep. Dean Arp, left, is leading efforts in the House to put a $2.8 billion bond referendum on the ballot in November. The Republican from Monroe chairs the House Capital Appropriations Committee.
Rep. Dean Arp, left, is leading efforts in the House to put a $2.8 billion bond referendum on the ballot in November. The Republican from Monroe chairs the House Capital Appropriations Committee. cseward@newsobserver.com

A $2.8 billion bond proposal cleared an important House committee Tuesday over concerns that the plan is moving too fast and would pay for projects normally financed by local governments.

The House plan, first outlined late Monday, mirrors a bond proposal long advanced by Gov. Pat McCrory, but that has not gained final approval in the legislature. The House plan is also aimed at being on the ballot in a special statewide November election. The timing is to take advantage of low interest rates.

But while the governor wants to split the bonds evenly between transportation and infrastructure projects, the House would direct $2.46 billion of bond money toward infrastructure and $400 million toward transportation. An additional $1.3 billion in transportation projects would be funded through budget allocations without borrowing, under the House plan.

“I think the time is right to do a very fiscally sound and fiscally wise policy,” said Rep. Dean Arp, a Monroe Republican who’s leading the bond effort in the House.

The plan faced more than an hour of questions before Finance Chairman Jason Saine cut off debate and called for a vote. The plan passed in a voice vote with no official count taken, and House leaders plan to hold a floor vote as soon as Wednesday.

Democrats split

House Democratic Leader Larry Hall was among those voting no. “I think we’re moving too fast,” Hall said, noting that the vote came less than 24 hours after the bill was released publicly. “We need to slow down and do it right. I’m not opposed to the bond concept, and I recognize the need.”

Hall added that he questions whether the bond bill “is a chip in the overall budget negotiations” with the Senate, where leaders have voiced reluctance to borrow money for transportation and infrastructure projects.

Democrats are split on the issue, with the moderate Main Street Democrats group issuing a news release praising the bond legislation just minutes after the vote.

“Time is running out to get a bond proposal on the ballot,” said Rep. Ken Goodman of Rockingham, who chairs the group of moderate Democrats. “This is a good bill because it serves as a starting point on making investments we need to keep up our roads and our secondary education system.”

UNC President Tom Ross and UNC Board of Governors Chairman John Fennebresque issued a joint statement thanking the House leadership for proposing $900 million in borrowing for construction of university facilities – in particular for high-end science buildings to meet what they say is a growing demand from students who want degrees in STEM, or science, technology, engineering and math.

Much of the money would go to new buildings as opposed to repairs and renovation – even though there is a backlog of needed repairs at UNC campuses. New buildings would add more ongoing operational costs at the campuses.

But some Republicans suggested that some items in the bond package – namely $500 million for public school construction and $75 million for local water and sewer projects – shouldn’t be funded at the state level.

“Those seem to me to be projects that are more traditionally locally funded projects,” said Rep. Dan Bishop, a Charlotte Republican.

Bishop also pointed out that transportation projects would receive about 14 percent of the bond money. House leaders are calling for $1.3 million in other transportation projects funded through existing revenue by stopping the transfer of money out of the highway fund.

“Are we giving transportation short shrift in this prioritization?” Bishop asked.

The House plan directs $1.7 billion in all toward transportation projects that rank highly in the state’s prioritization list. Much of that money, however, will be dependent on budget negotiations with the Senate and wouldn’t be finalized through the bond referendum.

Arp also faced questions about the timing of the bond vote. A special election in November would mean the bond will be the only item on the ballot in areas that don’t have municipal elections, likely resulting in low turnout. Rep. John Blust, a Greensboro Republican, asked if it might be “more prudent to wait until a statewide election.”

Arp said that the bonds can’t wait because interest rates – currently around 3.5 percent – would likely rise before next year’s presidential primary.

Rep. Paul Stam, an Apex Republican, said bonds are the best way to pay for the state’s long-term needs. “I think it is fair to ask people who move here 10 to 20 years from now to contribute to the infrastructure they’ll be using,” he said.

The bill is House Bill 943.

UNC system in bond proposal

UNC leaders are praising the House bond plan.

Proposed new projects include: $124.5 million for a life science/biotechnology building at East Carolina; $102.9 million for a science building at Western Carolina; $96.7 million for an engineering building at N.C. A&T; $90 million for a science facility at UNC-Charlotte; $68.8 million for a medical education building at UNC-Chapel Hill; $70.8 million for a health sciences building at Appalachian State; and $65.1 million for an engineering building at N.C. State.

UNC President Tom Ross said in a statement: “We’ve spent significant time assessing the capital needs of our 17 campuses, including their documented repair and renovations needs.”

One thing that was not on the UNC wish list: $58.8 million for a new western campus of the N.C. School of Science and Math, based in Durham. That project has friends in the legislature.

The House plan would spend more on universities than Gov. Pat McCrory’s plan, which included $500 million for the UNC system. The proposal from the House would also direct $300 million to community colleges and $500 million to the public schools.

Jane Stancill

Triangle items in bond proposal

▪ $85 million for a Department of Agriculture and N.C. State partnership's plant sciences building

▪ $105 million for a Department of Agriculture lab facility

▪ $7.5 million to renovate the Taylor Building at N.C. Central University

▪ $7.4 million for a residence hall at the N.C. School of Science and Math

▪ $68.8 million to replace a medical education building at UNC-Chapel Hill

▪ $65.1 million for a new engineering building at N.C. State University

▪ $38.2 million for a Highway Patrol training academy in Wake County

▪ $24.3 million for construction at Wake Tech

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