by Donna Martinez
Former Senior Writer and Editor, John Locke Foundation
It’s called the N.C. Build of Act of 2018, and it’s generating analysis from JLF’s Becki Gray, and questions for every North Carolinian.
Up to $300 million could be used each of the 10 years. The state treasurer would have to approve each round of debt, and two legislative committees would be consulted before each round of spending. Instead of a general obligation bond backed by the full faith and credit of the state — requiring voter approval — this proposed debt would come from transportation revenue, aka “special indebtedness,” and can go into effect without a referendum. A special indebtedness bond is considered riskier than a general obligation bond and, therefore, more expensive.
In this case, interest payments could be $80 million more for the whole debt package. In addition to the debt being non-voter approved and more expensive, it’s not clear for which projects the money would be used.
The best way to solve the big-ticket, long-term needs of our state is first determine what projects are so critical they warrant funding outside the General Fund and how much it would cost to meet those needs. Then, decide if the best avenue is borrowing money, or are there better, more sustainable options? After careful analysis, consider how much you can afford to borrow and the costs of repayment. Submit that plan in detail to the folks who will be paying for it — the taxpayers.
We’ll keep you apprised of the status of this potentially huge undertaking.