The more I read the Senate budget, the more I find…
The Senate's proposed budget will halt for two years the statutory transfer of a portion of corporate income tax collections to the Public School Building Capital Fund (PSBCF). This fund is used by counties to build or renovate schools, purchase classroom technology, or pay off school construction bonds. From the Money Report (p20):
Instead, funds will be transferred as a receipt to the State Public School Fund to temporarily offset the costs for public school operations. For FYs 2009-10 and 2010-11, General Fund appropriations will be reduced by the amount that was scheduled to be transferred to the capital accounts.
Many counties issues bonds specifically knowing that they would be able to pay it off through money coming to them from the PSBCF. If the Senate takes that revenue stream away, it basically creates a situation where counties will be forced to raise taxes or cut services in order to pay off debt.
When not used for debt service, these funds are often used for the "shovel ready" type of projects that we were told was needed to get our economy moving again — replace roofs, upgrade heating and air conditioning, removing asbestos, adding classrooms or general repairs to schools. So how many jobs will this cost by counties not having this money available?
Take a look the projects the PSBCF has funded in your county (pdf).
Basically, the NC Senate is going to take $125 million out of job creating projects while forcing counties to raise taxes to service pre-existing debt just because they can't find the money to cut out of a $20 billion budget.