bonds

Cowell warns of furlough fallout

ryanteaguebeckwith — Tue, 24 Mar 2009 14:04:01 -0400

Janet Cowell cautioned legislators about furloughs today.

In a press release, the state treasurer warned legislators about several fixes for the state budget shortfall that could hurt the state's AAA bond rating.

She said putting off debt payments or depleting the state's rainy day fund could lead rating services such as Moody's to lower the state's financial grade, leading to higher interest rates for public bonds.

Among the short-term fixes she warned could hurt the state: Ordering state workers to take furloughs.

The issue has been a hot topic of late, with Gov. Beverly Perdue saying she does not want them and House Speaker Joe Hackney saying they should be on the table. A bill has been introduced that would give Perdue the authority.

A staffer for Cowell said the release was not meant to take a stance on the issue, but simply to inform legislators.

Etheridge school bill included in stimulus

ryanteaguebeckwith — Thu, 15 Jan 2009 13:20:04 -0500

U.S. Rep. Bob Etheridge says some economic stimulus money may build schools.

In a conference call with reporters this afternoon, the Lillington Democrat said that a bill he has long pushed to provide zero-interest school construction bonds has been included in the House version of an economic stimulus package.

Earlier this month, Etheridge wrote President-elect Barack Obama a letter asking that school construction be included in the stimulus package.

His efforts got a boost from his recent appointment to the House Ways and Means Committee, which is overseeing the stimulus bill. He also attributed it to being at the right place in the right time.

"I had a piece of legislation that fitted the needs," he said. "It was timely, it was needed and the president-elect thought it would be most appropriate for his package."

He said that the bill currently includes some direct appropriations and some bonds. He estimated the bill would provide $448 million for North Carolina and create or sustain an estimated 10,752 jobs here.

Overall, Etheridge's proposal would provide for $26 billion for school construction.

University, prison money fast tracked

markjohnson — Tue, 06 Jan 2009 11:31:11 -0500

The state's top elected officials Monday morning approved an expedited schedule to sell $742 million in bonds for university buildings, prisons, museums and a polar bear exhibit at the N.C. Zoo.

The legislature already approved the projects. The Council of State, made up of the governor and other elected executive branch officials, voted to speed up the bond sales in hopes that the construction will generate thousands of new jobs and help ease the pain of a sagging economy.

"It has a huge ripple effect," Gov. Mike Easley, a Democrat, told the council. He initially proposed the accelerated sale in November. "Thirty days (sooner) makes a whole lot of difference if you're out of a job," he said.

State Auditor Les Merritt, a Republican, questioned the idea of speeding up the accumulation of a debt that was approved months ago, in a different economy: "We have a lot of projects that were voted on (by the legislature) in a bright looking picture and now the picture isn't so bright."

Only $65 million of the new debt will be issued this spring. Approximately $258 million in bonds likely will be sold in the fall and the rest in succeeding years. Easley said the plan allows the state to raise a large amount of money and start construction while not having to start paying down the debt until the end of 2009 when the economy likely will be recovering.

The projects include money for the planned Energy Production Infrastructure Center at UNC Charlotte, which will train engineers to build and run energy plants, particularly nuclear reactors. The council also approved an additional $107 million bond sale for the Green Square project in downtown Raleigh: An expansion of the N.C. Museum of Natural Sciences and a new office building for the Department of Environment and Natural Resources.

On the ballot: $2b road bond?

ryanteaguebeckwith — Fri, 29 Feb 2008 08:16:44 -0500

Legislators and voters might be asked to approve a $2 billion road bond on the November ballot.

Brad Wilson of Raleigh, who heads a statewide transportation study group that will make recommendations in May, said he hopes the fall ballot will include a major referendum.

"To really make an impact on the highway infrastructure, that bond [issue has] got to be of a certain magnitude -- or it's really not worth doing," he said Thursday.

Wilson heads the 24-member 21st Century Transportation Committee, a group of civic, business and political leaders. He also predicted the committee would ask legislators to stop the transfer of $172 millino from the Highway Trust Fund to the general fund. (N&O)

Too much debt?

ryanteaguebeckwith — Mon, 30 Jul 2007 12:58:30 -0400

Richard Moore doesn't like the budget's debt.

The state treasurer, who is seeking the Democratic nomination for governor, said in a statement that he does not approve of the nearly $670 million in certificates of participation in the budget, which unlike regular bonds do not have to be approved by voters.

"Our constitution clearly envisioned a vote of the people on major debt projects," he said. "This trend, if unchecked, could have a negative impact on our state's credit ratings."

With the new debt, Moore projected that the ratio of non-voted to voted debt will be 35 percent in 2012, above the median ratio of 26 percent for states given the highest AAA rating.

Moore called for a legislative cap on non-approved debt.

Futurama

ryanteaguebeckwith — Thu, 31 May 2007 13:48:08 -0400

A new ad campaign calls for higher taxes, but not in so many words.

Television spots for the Partnership for North Carolina's Future note that the state is undergoing a population boom that is causing congestion and sprawl and draining natural resources.

It ends with this vague call to action:

"Contact your legislators now. Urge them to make needed investments in North Carolina's future before it's too late."

The group's Web site is more specific. It calls for giving more counties the option to tax real estate sales; spending $4.2 billion on bonds for schools, conservation, clean water and affordable housing; and increasing a highway use tax.

The partnership includes state associations for school boards, county commissioners and city leaders; advocates for affordable housing and land conservation; and a lobbying group for transportation.

COPS: Raleigh

ryanteaguebeckwith — Thu, 10 May 2007 07:44:56 -0400

The state House is considering spending $450 million in debt for prisons, universities and other projects.

None of it will be approved by voters.

Although Gov. Mike Easley recommended a bond referendum, the House budget includes debt issued through certificates of participation.

COPs, as they are usually called, are more expensive than voter-backed bonds. In addition, the House would spend $65 million more than recommended by state Treasurer Richard Moore, and more than double what Easley proposed.

Spending that much without voter approval has some legislators nervous, according to Dan Kane in this story:

"We're committing the voters' money for eight years from now, 10 years from now, so the voters ought to have a say as to whether they want to pay for that much debt," said Senate Minority Leader Phil Berger, a Rockingham County Republican.

What are certificates of participation?

ryanteaguebeckwith — Tue, 08 May 2007 08:12:59 -0400

Answer:

Essentially a mortgage on the project they are funding. The government uses the land and buildings as collateral for investors who lend the money.

General obligation bonds, which are typically issued to build schools and buy open space, must be approved in a referendum. Certificates of participation, sometimes called COPs, do not require voter approval.

Since they are not backed by the government's taxing power, they come with a slightly higher interest rate, making them a more expensive way to fund projects.

In North Carolina, COPs have been used to build jails, parking decks and convention centers. In recent years, they have also become a popular way for North Carolina counties to build schools.

Around the Triangle, certificates of participation have paid for the Durham Bulls Athletic Park, the new Raleigh convention center, the Fayetteville Street Mall renovation and a parking deck for a downtown Raleigh hotel.

House budget

ryanteaguebeckwith — Tue, 08 May 2007 07:23:29 -0400

A House budget revealed yesterday would extend two long-running "temporary" taxes.

The quarter-penny sales tax and higher income tax on the wealthy were first approved in 2001 and were supposed to be slowly phased out.

But the House budget bill would keep the taxes another two years in order to raise $330 million for education and other spending.

Gov. Mike Easley supports continuing the taxes. Senate leaders and the Republican minorities in the House and Senate oppose it. (AP)

The bill also includes $60 million for county Medicaid relief, more spending on rural economic development and certificates of participation instead of voter-approved bonds for major projects. (Isaac Hunter's Tavern)

Wide open spaces

ryanteaguebeckwith — Thu, 26 Apr 2007 07:17:36 -0400

North Carolina lost 2.4 million acres of open space in the past 20 years.

And it will lose another 2 million acres over the next two decades if development continues at its current rate, according to a report by Environment North Carolina. (N&O)

The state is also losing farmland, including about 1,000 farms in 2005.

"The average age of farmers is getting up in the high 50s, and about the only retirement plan they've got is the land — to sell it," said a fifth-generation farmer in Leicester. (AC-T)

Advocates of land preservation used the report as part of their argument for the legislature to put a $1 billion bond referendum before voters this fall.

Rep. Lucy Allen, a Louisburg Democrat who is sponsor of the bond bill, noted that it would have competition from other budget needs, but she said it is urgent.

"There are going to be no second chances," she said. "As a former school board member and former mayor, I have many times heard people say, 'Yes, we need to do that but now is not the time.' ... I will tell you, there will not be another chance like we have right now to do this." (AP)