When is borrowing $2 billion smart? Now

The Observer editorial board

Student Callum Montgomery works in an outdated chemistry lab at UNC Charlotte.
Student Callum Montgomery works in an outdated chemistry lab at UNC Charlotte. dhinshaw@charlotteobserver.com

It’s rare – OK, it’s never – that Republican leaders like Pat McCrory, Phil Berger and Tim Moore agree on big policy questions with Democratic leaders like Dan Blue, Janet Cowell and June Atkinson.

But it’s happening now, through the miracle of math and everybody wanting something for what feels like nothing.

Voters in North Carolina’s primary will decide whether the state should borrow $2 billion. They should jump at the chance.

About half the money would go to UNC system campuses for new buildings and renovations. The state’s 58 community colleges would receive $350 million for projects and renovations. The remaining $670 million would be spent on water and sewer projects, agricultural research initiatives, state parks, the National Guard and public safety.

UNC Charlotte would receive $90 million for a new science building. Central Piedmont Community College would benefit from nearly $10 million. Other community colleges in the region would get a total of $30 million, and the state would spend $5 million improving state parks in the Charlotte region.

This bond package makes sense for many reasons, but two stand out:

▪ The state must make these kinds of investments periodically to stay competitive educationally and economically.

▪ Because the state has and will continue to pay off debt, it can borrow this money and still see its total debt drop from where it is today.

Take the UNC Charlotte science building as an example of a wise investment. The school’s current labs are overcrowded and outdated; the current science building was built in 1985. Since then, enrollment has ballooned and the number of science majors has exploded. About 15,000 students there take at least once science lab each year.

Now, the math: The state’s tax-supported debt has dropped from $6.5 billion in 2012 to $5.5 billion at the start of this fiscal year. Even with these bonds, the state’s debt will hover around $5 billion for several years, about 10 percent less than it is today. Total debt service payments will rise, but will stay below the recommended limit of 4 percent of state revenue.

In fact, the state could have afforded a bigger bond, and probably should have put one on the ballot. Interest rates are near historic lows, so it is a propitious time to get into the bond market. Fifteen years have passed since N.C. voters approved bonds; now with 2 million more residents, it’s time to do so again.

The individuals and organizations supporting the bond range from some of the most liberal to the most conservative, united in their belief that these are smart investments that the state can afford without raising taxes.

Despite that, the bonds aren’t a lock to pass. Given the state of the presidential race, more conservatives than liberals are likely to turn out for the primary, and they may be more inclined to oppose bonds.

Voters shouldn’t let this investment be killed by low voter turnout. Get out and support affordable, targeted investments in the state’s future.