RALEIGH, NC (WBTV) - The North Carolina House of Representatives gave final approval to a bill that will allow the state to issue bonds to fund construction of bridges and roads without the approval of the state's residents.
The proposal, known as Build NC, introduced by a legislative study committee earlier this year and strongly endorsed by Governor Roy Cooper, will allow up to $300 million in bonds to be issued at the request of the North Carolina Department of Transportation.
"Build NC is a critical tool North Carolina needs to ensure we can continue strong project delivery," NCDOT Secretary Jim Trogdon said in a statement after the measure was approved Tuesday afternoon. "Our transportation system is the backbone of our economic competitiveness and our quality of life."
In his release, Trogdon said the ability to request bonds be issued will be used to help fund more bridge and road projects.
State Representative John Torbett (R-Gaston), who chairs the House Transportation Committee, championed the measure through the state's lower chamber.
"It proves stability in the road building world out there throughout the state while the people's representatives create the new revenue model for the next 50 to 100 years," Torbett said.
North Carolina saw its first dip in revenue from the state's gas tax and DMV fees last year, Torbett said, which are traditionally two key sources of revenue to fund transportation projects. A decline in such revenue has been forecast for years.
"I think we're starting, perhaps, to see what we have predicted," Torbett said.
But State Treasurer Dale Folwell has expressed caution at the proposal to incur additional debt; especially through a vehicle that doesn't require approval from voters.
"I'm not opposed to transportation bonds or the people that are supporting them," Folwell said in a recent interview. "At the end of the day, when it comes to the transportation bonds, I'm looking for voter-approved debt. I'm looking for debt that falls within the debt affordability study that goes through the normal appropriation process, which has the maximum amount of sunshine on it."
In his interview, Folwell pointed out that his office is still in the process of issuing the bonds approved in 2016 as part of the Connect NC bond measure. The delay, Folwell said, is because many of the projects that were listed as ones that would be funded by bonds have taken more than two years to get to a point where the state is ready to issue debt to pay for them.
With today's market, the longer the state waits to issue debt, the higher the interest rate the debt would be issued at, which means taxpayers are on the hook for higher debt service payments.
"I often look for ways to do this and one is what we call a pay-go basis so that we can pay for the needs as we go. Obviously, by doing that, that lowers the overall cost of the project," Folwell said.
But Torbett noted the bipartisan support the bond proposal received and attributed that to the heightened need for road money across the state.
"Everyone is interested in building the infrastructure for excellent roads for the people of North Carolina, as well as my folks back home that want to see streets paved and potholes fixed and bridges not be closed for indefinite periods of time and really jump on and get those items working faster for the people of North Carolina," Torbett said.