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.
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.
Charlotte area bond projects
Here’s how money from the $2.8 billion bond referendum would be allocated in and around Charlotte:
▪ $90 million for a new science building at UNC Charlotte – a spokeswoman for the university said the facility is needed because “demand for science education is strong at UNC Charlotte, where 50 percent of students who have declared majors are pursuing STEM (science, technology, engineering, math) degrees.”
▪ $3.08 million for Lake Norman State Park
▪ $2.05 million for Morrow Mountain State Park
▪ $2.66 million for the National Guard Armory in Monroe
▪ $4.94 million for Gaston College
▪ $11.27 million for Central Piedmont Community College
▪ $5.59 million for Rowan-Cabarrus Community College