Republicans reluctant to borrow, but needs grow
Published March 29, 2014
by Scott Mooneyham, Capitol Press Association, published in Rocky Mount Telegram, March 29, 2014.
A couple of years ago, a friend who was working to raise money for a major cultural project in the state asked my opinion about the likelihood of winning a state grant from legislators.
My response was quick: “Have you looked in the back pages of the budget lately?”
The “back pages” referred to where, in a “money report” that accompanies the annual budget bill, state-funded construction projects are found.
Since Republicans have gained control of the state legislature, those pages have been pretty sparse.
That result is not entirely related to ideology.
Republicans took over the levers of power in Raleigh during tough financial times, and state construction and building repair have historically suffered during economic downturns.
Even so, Republican lawmakers may be more reluctant to embrace any substantial new building programs, even as building needs accumulate, because those programs have traditionally been financed by borrowing.
Government debt, meanwhile, has a pretty bad name among conservative voters, some of them unlikely to distinguish between operational debt like that at the federal level and the capital debt incurred by state and local government.
But Republican lawmakers have already taken steps to curb a bad practice of their Democratic predecessors, the borrowing of construction dollars without seeking voter approval.
Any major state construction plans in the near future would likely take place only if a referendum were put before voters, something that hasn’t happened since North Carolinians approved a $3 billion bond issue for university and community college construction in 2000.
Lt. Gov. Dan Forest recently raised the possibility of a bond referendum while speaking to a group of building contractors and architects.
Both Forest and Gov. Pat McCrory have commented on how struck they were, upon taking office, at the poor condition of some state buildings.
Their impressions were backed up by a report from the State Construction Office that found state agencies and universities facing more than $3.9 billion in building deficiencies because of deferred maintenance and repairs.
Forest and McCrory, though, are not standing for election this year. State legislators are.
Because of that, don’t expect legislators to jump on the idea of a big construction/borrowing plan when they return to Raleigh in May.
At some point, though, lawmakers won’t be able to ignore building needs that are piling up.
A few years of financial prudence have already lowered existing levels of debt, meaning the state has more room to borrow money without creating much in the way of additional taxing pressure.
Interest rates also are low, something that might change in the near future. And borrowing money at low interest rates for long-term capital projects makes as much sense for state government as it does for individual borrowers who finance their homes.
Then there is that ultimate check on whether plans to borrow money to build are a good idea: With a referendum, voters get to decide.
March 29, 2014 at 10:22 am
Norm Kelly says:
A few ideas come to mind immediately when it comes to government spending; specifically at the state level for this post.
When the state spends money on things that it shouldn't be spending on, it simply makes spending money on things that are required much more difficult. Take for instance, the tea cup museum. Take for instance the theater built for the purposes of having Dolly Parton's brother sing songs. A theater that never had a draw; a theater that had to fire the main reason it was built. And the state stepped in to help out. Take for instance the lake-rated school bus ferry that was to be used on the ocean. The list of wasteful, perhaps even stupid, spending that has been done in at least the past decade is so long that it could very easily explain why the state has difficulty spending money on things that actually need attention. Add to this list the plan of Demoncrats in the NCGA to extend unemployment benefits, borrow money from the feds to do it, continue to extend the benefits and continue to borrow money from the feds, with NO IDEA how the money was going to be repaid. If 'plans' like this continued, then even required maintenance like bridges that need repair or they may fall into the river below wouldn't be able to happen. Simply because the money wasn't there because it was wasted on other, non-essential things.
Just like my budget, every level of government needs to live within some sort of REASONABLE, LOGICAL budget. If the people with the power continue to waste money on tea cup museums, then we won't be able to spend that SAME MONEY on the items that truly need to be taken care of. When I have a mortgage payment to make, for instance, I have to choose between a limo ride, dinner at the Angus Barn with my wife for our anniversary OR the mortgage payment. If I choose the anniversary celebration instead, would it be right for me to petition the government, at ANY level, to assist me with my mortgage payment? Of course not. But that appears to be the way the Demon party wants things like this to be handled. Don't worry about the money, they seem to say. It'll come from somewhere. If we can't steal it from someone else, some rich person perhaps, then we'll simply pick it from the tree out behind the legislative building.
For MANY years, the DemocRATs who controlled Raleigh told us that they were cutting the budget to the bone. At the same time, they were hell-bent on raising EVERY tax, fee, income stream possible including the gas tax, to steal even more money from us to pay for their pet projects. Remember when Gov Mike stole the money from the E911 fund? Every month I pay this tax for a specific purpose. But because the libs in charge couldn't get their finances in order, the alternative was for the Gov to steal the money from this fund to make the budget balance. This also happened to the county/local sales tax fund. The money was SUPPOSED to be collected by the state then sent to the local governments for their share of the sales tax. But for some reason, the state stole the money from the local governments. Leaving the local governments struggling. For the purpose of helping to balance the budget at the state level because the LIBS in CHARGE couldn't manage to balance the budget on their own. Seems the libs in charge in Raleigh just couldn't do simple math. Money in minus money out shouldn't be negative. Going into debt for stupid things just plain DOES NOT make sense. Going into debt temporarily to pay for NEEDED/REQUIRED expenses actually does make sense. But when money is spent on stupid stuff that causes us to have to go into debt to pay for the required expenses, this also does not make sense. Spending money on the tea cup museum could have meant that we didn't have that money to spend on building maintenance around the state. But this is just one example of the state spending money foolishly. The libs were/are also opposed to the state selling off & privatizing the ABC store system. This is an income stream that could be lucrative at the same time that it cuts off future expenses by the state that actually aren't necessary. Selling off the ABC store system is a win-win for both the state AND the private sector. Just think, if the ABC store system is privatized, this is a whole group of state buildings that may no longer need to be maintained, saving the state money in that fund also.
