Tide turning against pending bond issue
RALEIGH — Several counties have openly expressed their dissatisfaction with the proposed Connect N.C. bond issue, with the express intent to weaken support for this spending measure.
In a recent call to the radio program hosted by Chad Adams, a guest disclosed what she has discovered: some colleges and institutions of higher learning plan to use funds from the bond for their own intent, contrary to what the public is being told about the purpose of the funds.
How can this be, you ask? Doesn’t Connect NC designate how the funds must be used? Outside of the generic designation of “this many millions” to “this county community college,” voters are given very little information on how the funds will be used. Does a particular community college intend to remodel a building, purchase new computers, or build tennis courts and swimming pools?
Answer: We do not know.
A public records request was made, asking for the details of the specific projects of the community colleges across the state. Remember that the bond is an omnibus spending proposal. Residents are not only voting for their local projects, bond proponents are also asking voters to approve every single project within the bond across the entire state. Should we have access to information to know what we are approving?
The Governor’s office responds to the request by stating that the only way to obtain detailed information about each of the community college projects is to contact each individual campus.
The lack of scrutiny over how the funds will be used is another slap in the face to the next generation of North Carolina taxpayers. How many voters do you believe are going to contact each individual campus across the state in order to learn the details of what they are supposed to vote on?
In Haywood County, the County Commissioners, who were originally ‘pro-bond’ have retracted a resolution of support once they learned of the Connect NC deception. They changed their mind and shelved the resolution after presented with some facts about the bond that contradicted statements made within the resolution.
At a Wake County Republican Party precincts meeting earlier this week, a straw poll of over 1000 attendees showed that 68 percent of the group intends to vote AGAINST the bond! This demonstrates great progress from previous polling, which showed that the majority of Republican voters, who were polled, intended to vote for the bond. There is still much work to be done to continue to reach voters with this message, but this group is energized knowing that the true facts surrounding this bond do not resonate with voters.
It should be noted that Rep. Bob Steinberg, who represents this area in the General Assembly, has expressed his intent to vote for the bond and that he intends to speak at an event in Windsor on Thursday of this week. He believes that the state is in a good financial position to take on $2 billion worth of debt for worthwhile projects, which are yet to be identified.
But, he has also pointed out that when the Republican Party took control of the House of Representatives in 2010 and the Senate in 2012, that they were faced with a huge debt to the Federal Government for loans to cover Unemployment Compensation, which was paid off early, saving the state government hundreds of millions of dollars, which he submits can be done again with this bond debt.
In point of fact, the Republican Legislature has delivered a $400 million surplus. Nevertheless, the opponents of this bond are skeptical about taking on this much debt at this particular time.
Further, there has been much discussion recently in the financial news, about the prospect of a second dip in the economy and a looming recession later this year. Federal Reserve chairman, Janet Yellin, recently testified about the prospect of negative interest rates. We have already seen negative interest rates in Japan. So the reality that this condition can become real, is not too far-fetched.
A negative interest rate means the central bank, and perhaps private banks, opts to charge negative interest – an unusual state of affairs in this country. Instead of receiving money on deposits, depositors must pay regularly just to keep their money with a bank.
Negative interest rates can certainly be beneficial to borrowers, of all stripes, as they make plans for capital improvements and other things of this type. But it also means that the national economy is weak and that the Federal Reserve is essentially out of bullets to have any positive impact on the economy, thus the situation that we now face.
Clearly, negative interest rates are not an absolute, but the mere fact that the Fed is talking about this, should give our legislature and governor some pause when considering an indebtedness such as this bond.
At a recent meeting of Republicans within the Third Congressional District, two representatives of the NC House attended. Both of these men – Rep. Mike Speciale and Rep. George Cleland — were steadfastly opposed to the bond issue.
Both spoke openly about their views on this subject. Cleland referred to this bond as the ‘Gov. Pat McCrory re-election act.’ He also expressed his view that the governor would come back to the legislature in the near term, for authorization to borrow more money, and this time for transportation. Considering the apparent deception that we have now, it seems unrealistic to believe that there would be any support for transportation borrowing, especially if this bond is approved.
In regards to transportation, there has been considerable discussion about placing tolls on Interstate Highways throughout North Carolina. The tolls have already been discussed pertaining to I-77 and the governor and his supporters believe that road tolls will help us become more competitive by getting the road projects started earlier.
This is, however, a long-term economic consideration, which can help North Carolina become more economically vibrant and open up the state’s highway system to more rapid transit. Areas such as Elizabeth City and surrounding counties could benefit. But clearly, with the economic concerns about negative interest rates looming, it certainly seems to defy judgment to engage in this borrowing until the election is completed and we know something more about what the long-term economic impact is going to be based upon which party controls the White House.