RALEIGH – A group of Senators held a press conference today to promote the Senate transportation funding plan while criticizing Gov. Pat McCrory’s $2.85 billion “Connect NC” bond proposal. Sen. Bill Rabon (R-Brunswick) led the group of the Senate transportation committee co-chairs, and McCrory’s budget director responded later in the day.
“We believe there is a better way than to borrow $2 billion to a few piecemeal projects – it puts taxpayers on the hook for 20 years, $850 million is interest,” said Rabon.
Their comments come as McCrory works on Connect NC, which would fund what the N.C. Department of Transportation calls strategic projects to boost economic development in the state. According to the governor’s economic advisers, the state is well positioned for a bond because of its Triple-A bond rating, allowing low interest rates on the bonds. Only nine other states have this highest rating, given by the three major credit agencies to states that have reduced debt. The senators said that their plan would be a better way to accomplish the same goals.
“Our plan is to invest an additional $130 million in the STI (Strategic Transportation Investments) plan so that N.C. DOT can complete 70 projects without incurring additional debt,” said Senator Michael Lee (R-New Hanover) “The senate plan has over $139 million for structurally deficient bridges, allowing us to take 400 bridges off that list.”
The wrangling over transportation funding comes as budget conference committee negotiators work out the details of a final budget. It also comes the same week as the final budget surplus numbers were released showing that the state has a $445 million revenue surplus. The surplus triggered another drop in the state corporate income tax to 4 percent, giving North Carolina the lowest top corporate rate in the country.Lee Roberts, Gov. McCrory’s budget director, held a press conference later in the day to respond to the senators. Roberts said that the administration’s plan is financially preferable because it would spend more money sooner and takes advantage of interest rates that many think will rise soon.
“That’s not the right way to look at numbers over time,” Roberts said of the Senate’s claims. “A dollar in 2036 is not a dollar today.”
Roberts said Sen. Rabon was setting up a false choice when he suggested stopping the transfer of money from the highway fund to the general fund instead of issuing bonds.
“We think that you can both stop the transfer and issue the bond; take advantage of low long-term interest rates and of our bond rating and get more of these projects under way sooner, relieving congestion and addressing the infrastructure needs of a rapidly growing state,” Roberts said.
Roberts also said that while the statutory deadline for getting a referendum on the November ballot had passed, it could always be changed by the bill that authorizes the referendum. He stressed that getting it on the November ballot was important, since interest rates are expected to rise before a March referendum could take place.