NC voters approved the state’s plan to use bond funds to pay for improvements and infrastructure in parks, schools, and neighborhoods last year, but it’s easy to be confused about the hows and whys of how the plan will work. Following is a quick rundown of what a bond is, a little history of the NC bond measure and how the money is to be divided and spent at the state, county, and city levels, and some ways to keep up with future developments.
What is a bond?
Essentially, a bond is a loan where you are the bank. You give an amount to someone (usually a government or company) with the expectation that they will be able to pay you back, plus a little for the use of your money.
So investors are loaning money to North Carolina against its history of growth and debt repayment. NC enjoys a triple-A credit rating, part of the justification for adding new debt to the state budget.
We voted on the decision because the bonds are being issued against North Carolina’s General Fund, the name for the pool of money that largely comes from our taxes. Investors expect that if something goes awry, they will be repaid from the General Fund. This type of bond is referred to as a general obligation or GO bond. Voters have a say in GO bonds in many states.
The Connect NC Bond Bill
Here’s the full-text of the bill proposing the recent bond measure. The title states that the act will “…further economic development…consistent with the Connect NC plan.”
Connect NC was originally a transportation infrastructure plan enacted by then-Governor McCrory in the early aughts. It was criticized for going back on its promise that no tax increases would be required to pay for it in the very next year after its enactment. Since then, gas taxes and various vehicle-related fees go back into highway and transportation funding. So highway projects were cut from projects in the new bond bill.
Governor McCrory habitually made cuts to education in order to balance tax cuts elsewhere. The Connect NC plan was seemingly intended to address some of the problems colleges and universities have faced in implementing slashed budgets over the years. Critics of the bond measure from the left point out that the measure won’t be a replacement for this funding and could obscure the real need occurring on campuses and in departments across the state. Opponents from both sides remain unconvinced that the plan will function as intended, recalling the previous Connect NC measure.
The Connect NC plan addresses more than education infrastructure, however, and proponents expect that projects will have a real, measurable positive effect on North Carolina’s economy.
Allocating Bond Funds
The next few meetings about the future and timeline of the Connect NC bond at the City and County levels here in Asheville/Buncombe county will focus on the budget.
Instead of trying to untangle county versus city versus state budgets on large-scale undertakings that involve every level of government, the bond will move forward on a project basis. Schools, parks, and other entities will work with all relevant parties to put together plans that, once approved, use funds to achieve specific ends.
News about the Connect NC bond will continue to emerge as projects get approved, denied, or modified. Keep an eye on your favorite parks and local college websites; many have been posting regularly about their plans, like this from UNCA about building renovations.
Read more about the first presentation of bond projects on HiAltaRealEstate.com
Check out Connect.NC.gov for ongoing information about projects.