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Bills to rebuild roads, schools moving

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By Jon Hawley
Staff Writer

Tuesday, June 12, 2018

North Carolina would borrow billions of dollars to rebuild its roads and schools – with preference for rural communities like those in the Albemarle – under two bills moving through the General Assembly.

Last week, the state Senate unanimously passed Senate Bill 758, a bill that would allow the state to issue $3 billion in bonds over 10 years to finance highway projects. The bill is now under review in the House.

“The Build NC Act” will “accelerate the construction of hundreds of road and bridge projects across North Carolina,” Sen. Bill Cook, R-Beaufort, stated in an email following its passage.

He further explained the bill would allow borrowing up to $300 million a year over a decade, with revenues to be repaid by the state's Highway Trust Fund “at no additional cost to taxpayers.”

In northeastern North Carolina, the hope is the legislation will accelerate construction of Interstate 87 along US 17, according to local officials.

Angela Welsh, planning director for the Albemarle Rural Planning Organization, explained last week that, under the 10-year State Transportation Improvement Plan, transportation projects are funded through statewide, regional, or divisional dollars. Road projects for northeastern North Carolina generally only qualify for regional or divisional funding, and S758 would require bonds to support projects funded at those levels. That means more money would be available sooner for local projects.

For I-87, the bond funds will either pay for I-87 projects or pay for projects in line ahead of them, freeing up funds in future years. Either way, the wait for the interstate should get a little shorter, she explained.

Notably, I-87 is expected to cost well in excess of $1.3 billion, meaning it will be built gradually over perhaps two decades.

Though Welsh said it appears the entire region will benefit from S758, she also said it won’t fund one high-priority project. The legislation forbids using bonds on toll-supported projects, and so cannot fund the Mid-Currituck Bridge. DOT's website states the completion date for that project remains “to be determined.”

N.C. House Reps. Bob Steinburg, R-Chowan, and Howard Hunter III, D-Hertford, have also told The Daily Advance they support the legislation. Steinburg even said in an interview last week he hopes the House will unanimously pass the legislation, as the Senate did.

In an email Monday, Hunter also said the legislation is “consistent with debt affordability measures determined by the State Treasurer.” The legislation allows the State Treasurer to block or reduce the issuance of bonds to ensure the Highway Trust Fund's debt remains manageable. The trust fund is partially supported by fuel taxes.

In addition to considering new debt for road work, lawmakers are also considering new debt for school construction. Under House Bill 866, the state would issue $1.9 billion in bonds for school construction. Those school bonds couldn't be issued without voters' permission, unlike the transportation bonds. If H866 is enacted, the school bonds would be a referendum, a choice for voters on ballots in November.

Cook and Steinburg both supported H866 last week, with Cook commenting “we need to help our rural counties fulfill their commitments in school construction.”

Hunter did not respond to questions last week about H866, but last month supported issuing school bonds in concept, similarly citing local schools' needs. Additionally, Washington County Commissioner and Democrat Cole Phelps, who’s running against Steinburg for Senate District 1, also wrote in an email he supports both the school and transportation bond bills.

The legislation could make an especially big difference in Camden and Chowan counties, where county managers told the Advance last week they may need to build new high schools. Chowan County Manager Kevin Howard said it's possible the county will instead renovate the roughly 60-year-old John A. Holmes High School. A new high school could cost $40 million, he said.

Camden, meanwhile, estimates a new high school would cost $30 million, County Manager Ken Bowman said.

H866 would not totally cover those costs for either county, however. It specifies that school funding is to be issued based upon current and projected growth in student population, plus funding for “small” and “low-wealth” counties. That means Camden and Chowan would each get about $13.5 million of the $1.9 billion in bonds, with Perquimans getting $12.3 million, Pasquotank getting $7.9 million, and Currituck getting only $2.9 million.

Though H866 wouldn't cover the total cost of new schools, Steinburg said it could greatly reduce how much Camden and Chowan have to borrow for them.

However, Steinburg also said he's not sure the legislation will pass this session, adding, it's remained in committees for weeks and hasn't gotten floor votes yet, based on the General Assembly’s website.

Of course, even with lawmakers' support, it's possible voters will still deny taking on new school debt – a choice that the transportation bond bill wouldn't give them. That led Howard to comment he felt the state should treat school debt like transportation debt: if one requires voter approval, so should the other, he said.

In an email last week, an official with the State Treasurer's office explained the transportation bond legislation doesn't require a referendum “because it does not pledge the 'full faith and credit' of the state, which is the taxing power of the state.”

That official also wrote that, based on the state's latest debt analysis, North Carolina could afford it if both the school and transportation bonds were approved.

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