Today in North Carolina

Building needs piling up

April 4, 2014 

— A couple of years ago, a friend who was raising money for a major cultural project in the state asked my opinion about the likelihood of winning a grant from state lawmakers.

My response was quick: “Have you looked in the back pages of the budget lately?”

The “back pages” referred to where state-funded construction projects are found.

Since Republicans have gained control of the state legislature, those pages have been pretty sparse. But that result is not related entirely 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 might be more reluctant to embrace any substantial new building programs, even as building needs accumulate, because North Carolina has traditionally funded those programs 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 governments.

But Republican lawmakers have already taken steps to curb a bad practice of their Democratic predecessors, the borrowing of constructions dollars without seeking voter approval.

Any major state construction plans in the near future would likely take place only if lawmakers placed a referendum before voters. 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, which 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, state 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.

Also, interest rates 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 borrowing money to build is a good idea: With a referendum, voters get to decide.

Scott Mooneyham is a syndicated columnist who writes about state government and politics.

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