What will $2 billion bond really pay for?

by Matt Caulder, Capitol Connection, September 23, 2015.

The Senate gave tentative approval today to a $2 billion bond proposal that voters would have to approve during the presidential primaries next year – but language in the bill seems to give the General Assembly control over how the money is spent after the bond is approved.

The bill comes as state legislators work to close out the extended 2015 Long Session and get out of Raleigh after passing a budget last week.

Currently the primary is expected to be on March 15, 2016.

While voters in the state will have to approve the initial sale of the bonds, under a provision in the bill the state legislature would be able to reallocate the portions of the $2 billion to other areas without requiring another vote.

The bond proposal originally included $800 million for transportation upgrades but the bond package approve in committee late Tuesday directs money to state building projects including educational institutions, state parks and attractions as well as making money available for local water and sewer upgrades and upgrading local parks to make them more handicapped-accessible.

The bond proposal would direct $980 million to the University of North Carolina system, $350 million to the community college system, $312 million for local parks, $70 million to the state National Guard, $179 million for agriculture, $100 million for state parks and $8.5 million for public safety — but the legislature does not have to stick to those figures.

GA can shift funds around

Sources at the state Fiscal Research Division say that the language is common in bond proposals and that they believe the legislature would be limited to shifting money among the projects in the proposal.

But others disagree.

“The legislation basically grants unlimited discretion to the General Assembly to reallocate bond proceeds as they see fit without a vote of the people,” Elliot Engstrom, staff attorney with the Center for Law and Freedom, said.

The Center is a funded by the Civitas Institute, a conservative think tank based in Raleigh, and offers free legal services to clients in matters involving government overreach and constitutional violations.

Section 1.(f), subsection 3 of the bill authorizes the General Assembly to, during any session, “increase or decrease the allocations of the proceeds of public improvement bonds and notes, including premium thereon, if any, for projects set forth in subdivision (1) of this subsection or reallocate any amounts among agencies or projects not listed in this subsection but listed in the six-year capital improvement plan.”

In plain language, the provision would allow legislators to shift the $2 billion around to other projects as they see fit, including to agencies outside of the scope of the original projects included in the bond proposal.

The state’s six-year capital improvement plan, by statute, includes everything under the purview of the state except transportation infrastructure projects.

G.S. 145C-8-5, which lays out the requirements for the plan, says the plan “shall address the long-term capital improvement needs of all State government agencies and shall incorporate all capital projects, however financed, proposed to meet those needs, except that transportation infrastructure projects shall be excluded.”

The plan is separated into two parts: first, repair and renovation requirements, and, second, real property acquisition, new construction or facility rehabilitations.

The 1999 bond proposal for higher education included a reallocation clause that read, “The projected allocations set forth above may be changed from time to time as the General Assembly may decide” but did not mention any other projects.

A Senate committee gave final approval to the draft bill Tuesday before sending it to the Senate floor Wednesday for a vote.

The bill passed the Senate in a 46-2 vote Wednesday morning and it is expected to come up for another vote Thursday morning at 10 a.m.

Two Republicans, Sens. Andrew Brock (R-Davie) and Joyce Krawiec (R-Forsyth), voted against the bill.

No Democrats opposed the bill.

http://nccapitolconnection.com/2015/09/23/what-will-2b-bond-really-pay-for/