RALEIGH – That is the first thrust coming out of Speaker Tim Moore’s office a mere two days after being nominated to a third term as leader the N.C. House. Moore issued a press release Thursday indicating he will file legislation upon the convening of the 2019 legislative session for issuing a second public education bond of $1.9 Billion.
After the measure is approved by the legislature it would be considered by voters in a 2020 ballot referendum, according to the statement.
The proposed bond would break down into three tranches: $1.3 billion provided to K-12 school construction needs, $300 million in capital funding to UNC system institutions, and another $300 million for facility needs in North Carolina’s community colleges.
So basically the first order of business for Speaker Moore and the Republican caucus is to sign us all up for another couple billion dollars in debt? The needs of public schools and colleges is something that does need to be addressed, but there are options to appropriate tax revenues already making their way to government coffers for that purpose without burdening taxpayers further with debt servicing costs.
Perhaps with allocating some of the hundred of millions of dollars in budget surpluses of recent years, incrementally, toward this end? These bonds are not spent all at once, after all. The key pieced out in separate bond offerings over a period of years, and spent in much the same way. Is the legislature not fiscally responsible enough to approach capital needs for schools and colleges in the same manner with regular tax revenues?
It was not long ago that many of the same Republican leaders were boasting of how they paid off a few billion dollars in debt to the federal government left to them by previous legislatures, and did so ahead of schedule, saving taxpayers from future interest payments and dramatically improving the State’s fiscal situation.
So why jump right back into the debt pool? It’s like finally paying off that big credit card balance, only to sign up for another one and head to the mall.
‘But, but, but,’ proponents will say, ‘we would be silly not to take advantage of our credit rating and low interest rates to secure this money now. Plus, it’s for the kids!‘
You know what is cheaper than paying low interest on nearly $2 billion in bonds? Paying ZERO interest by not saddling taxpayers with debt in the first place. To use another analogy, it’s like seeing that super sale in a store, buying all you can carry and then bragging about how much money you “saved.” Probably not as much money as would have been saved by employing a little self-control.
But leaping into the new year with a taxpayer debt proposal isn’t the most egregious part of it. That honor is earned by the fact that lawmakers proposed, and voters approved a $2 billion ‘Connect NC’ bond a mere two years ago, and less than half of that money has been spent.
In 2016 Republicans sold the Connect NC bond as a pressing need to address transportation, infrastructure, and school needs. To date, the State Treasurer has floated two separate bond sales as part of the Connect NC initiative, the first for $400 million, and a second for $200 million. Some quick math, and that leaves $1.4 billion in already approved bonds yet to be sold.
Now, self-labeled ‘fiscal conservatives’ are proposing another $1.9 billion in debt. Some more math: $2 billion in Connect NC bonds + $1.9 billion = $3.9 billion in taxpayer debts that will result in hundred of millions in debt servicing costs. All brought to you by ‘small government’ Republicans.
And while interest rates have been historically low, that is no guarantee that they will remain so. The Fed Funds Rate has been rising for the better part of two years, so when the last of these bonds are actually sold – about 5 years from now? – interest rates could be a lot higher.
Republican politicians usually talk a good game when it comes to the notion of spending (other people’s) money you don’t have, but in practice they are all in for spending (other people’s) money when it will help their image leading into the next election cycle. North Carolinians should vote ‘No’ on saddling taxpayers with billions more in debt when it inevitably hits the ballot in 2020, but don’t get your hopes up. As with the Connect NC bond, the feel-good nature of checking a box on the ballot in the name of education has strong appeal. Especially when a majority of those voters aren’t the ones footing the majority of the bill for such spending sprees.
If these are the priorities of the new Republican majority on Jones Street, it means they’ve abandoned any remaining linkages to the cause of conservatism.