Wayne County’s legislative delegation is divided down party lines on Gov. Roy Cooper’s $3.9 billion bond proposal that would include $28,206,384 for Wayne County Public Schools and $5,007,050 for Wayne Community College.
District 21 Rep. and fellow Democrat Raymond Smith of Goldsboro likes the proposal.
Republicans, District 10 Rep. and House Majority Leader John Bell of Goldsboro and District 7 Sen. Jim Perry of Kinston both worry about the fiscal risks associated with such a large debt.
The proposed bond would have to be approved by the state’s voters.
The $3.9 billion would include $2 billion for K-12 public schools statewide to help meet the need for at least $8 billion in new construction and renovations.
It also would include $500 million each for facility improvements at community colleges and University of North Carolina System institutions and $800 million to invest in local water and sewer projects. The proposal would also invest $100 million in the N.C. History Museum and the N.C. Zoo.
“A bond is the smartest way to invest in school construction and renovation and other critical needs without causing harmful cuts elsewhere,” Cooper said.
Ford Porter, a spokesman for the governor’s office, said Cooper’s Invest NC proposal is fiscally responsible and based on identified needs for schools and other critical infrastructure.
“Invest NC provides funds for construction and renovation for K-12 schools, community colleges and state universities and upgrades to aging local sewer and water infrastructure,” Porter said. “These areas face nearly $30 billion in capital needs, and Gov. Cooper’s plan gets hammers swinging, maintains North Carolina’s AAA credit rating, and doesn’t grow the percentage of state debt.”
Bell calls Cooper’s bond proposal politically motivated, unrealistic and fiscally irresponsible and one that is dead in the water.
The House and Senate have rolled out bipartisan proposals that address school construction and repair needs that are fiscally responsible, Bell said.
“He knew our number,” he said. “(Cooper) actually in his State of the State talked about supporting (House) Speaker (Tim) Moore’s bond, but his bond had to be bigger. His proposal had to be bigger.”
Moore’s proposal was for $1.9 billion under which Wayne County would receive $23,646,243 or approximately $4.6 million less than under Cooper’s proposal.
The K-12 component of Moore’s proposal is about $1.4 billion and approximately $400,000 is included for community colleges and universities, Bell said.
The $1.9 billion does not include the disaster relief funding for repairs or additional lottery revenues Wayne County will receive as a Tier 1 county — one of the state’s most economically distressed counties, he said.
Nor does it count the additional $600,000 in low-wealth funding Wayne County now receives above and beyond what it had been receiving, Bell said.
“That’s all new revenue dollars,” he said. “That is a big chunk of change for our area.
There will be at least three or four bond proposals this session, some of which could be hybrids of bonds and pay-as-you go, Bell said.
“We are going to have that (the governor’s proposal) on the floor Wednesday and Thursday,” he said. “What they (the governor’s office) are saying is that the backlog of school construction needs are around $8 billion. I think what the governor was trying to do, he wanted his to be more and come in just under that $4-billion mark and that way, he could say that he took care of half of it.
“The actuality of it is, if you go borrowing that much money, you are going to bump up against the debt cap that you can have and it puts you in a really risky situation, especially when you want to do some of the other things that you want to do in the budget. If he had come in lower, if he had come in at $2 billion with some different caveats, I think that is worth a discussion.”
But when Cooper came in at double the amount both chambers had been talking about, that’s just not sustainable to do along with the other priorities that the state has, Bell said.
Bell said he thinks what voters will eventually see is about an $1.9 billion school construction bond/pay-as-you-go model using existing revenue streams.
The good thing about a bond is that voters approve it, he said.
The downside is the time it takes to hold the election and sell the bonds — a very long time before the first dollars are put into the local school system, Bell said.
A pay-as-you-go/bond model would allow money on the ground immediately, Bell said.
MORE POWER TO NEGOTIATE
“The budget just came out (Wednesday), so everybody is chewing on the budget on a line-by-line basis,” said Smith, a freshman legislator and former at-large member on the Wayne County Board of Education. “Individuals are picking out those parts that affect their constituents, and they are certainly looking for those things in the budget that they can say will be positive for their areas.
“The school bond is something that I think will be positive for the entire state of North Carolina. First and foremost, the governor in briefing us (and) basically told us the $3.9 billion figure is something that he feels is a good start,” he said.
Of course, no bond will meet every need because needs are ongoing, Smith said.
Smith, who was a candidate at the time, toured Rosewood Middle School, in August with Cooper.
“Those tours really had a profound effect on the governor,” Smith said. “As you can see, he is focusing on those schools that are 50 years old and older. Of course, they lack the modern amenities. You have to upgrade those schools, and he wants to replace them.
“As far as the conversation across the aisle, we have not gotten into those conversations yet because we are in the midst of dealing with some things that I guess had not been dealt with in the last session, and we are kind of getting those things cleaned up. We are passing what I call a lot of feel good bills right now.”
Smith said he is cautiously optimistic about the governor’s budget having a chance to pass, even though it’s not likely going to pass in its current version. Any number of amendments can be expected, he said.
“However, the reality of it is, if those amendments are not amenable to the governor, we have the veto back in the governor’s hands,” Smith said. “We have broken the veto-proof majority.
“So that places us in a much better position to negotiate than we have been in years past. That ability to negotiate gives us optimism as it relates to the final product being something that both sides can readily agree upon.”
Like Bell, Perry, who was appointed to the Senate in January to fill the unexpired term of Louis Pate, also questions the sustainability of borrowing so much money.
“I think generally when we discuss it as a delegation, I think we all see value and see some need for capital in the school system and in some other areas as well,” he said.
That need is seen regardless of whose plan it is, Perry said.
Wayne and Lenoir are Tier 1 counties and want the help, he said. Both are in Perry’s district.
“What I am trying to learn, as a new member, and really understand is the cost of that capital and what the real impact is long term,” he said.
For every $2 billion, the state pays about $1.2 million to $1.3 million in interest, Perry said.
“I worry about that,” he said. “We all see capital needs and now we need to work together to figure out the best way to get there. In my experience, the best way to get somewhere, the best way to work with people, is to have a conversation and communication on the topic.
“If you ever have one party out of a group of three that refuses to have conversation and wants everything their way, I don’t think that works in most relationships. I am just glad that we are talking about different vehicles to provide capital funding. We all agree on that.”