If there was an award for irresponsible, ill-timed legislation I think SB 1378 should be given strong consideration. The bill calls on the state to finance the construction of new engineering school buildings at N.C. State and North Carolina A&T University. To do this, the bill asks the state to borrow a whopping $450 million for the project.
Though the actual bill wasn’t available at the time of this writing (See press report), no doubt financing would be made through special indebtedness Certificates of Participation, commonly known as COPs. State and local governments love COPs because they don’t require governments to go through that pesky referendum process and actually get voter approval before borrowing.
With 11 percent unemployment and a state economy in the dumper, I wouldn’t have thought it would be a good time to move forward with a half-billion dollar construction project, but I guess that’s just me.
Sounds like the State Treasurer might also not like this bill. According to the State’s annual Debt Affordability Study Report, “the state has substantially exhausted its General Fund capacity until FY 2012”.
The Debt Affordability Study also reported:
The State’s General Fund percentage of non-voter approved Special Indebtedness is projected to exceed the median level for states in its peer group. Therefore the Committee recommends that the State consider the authorization of General Obligation debt as the preferred method to provide debt financing for its capital needs.
People are out of work and losing their jobs. The Treasurer’s office says the state’s credit card is maxxed out. Evidently Sen. Marc Basnight , Sen. Tony Foriest and friends in the State Senate are oblivious to such considerations. And, they’d rather not give you the opportunity to vote on their proposal either. Unbelievable.