WASHINGTON — The North Carolina Senate yesterday passed a $451 million bond package for its state university and community college systems as some legislators emphasized the importance of education investment even in the face of a large budget deficit.
Bond proceeds will be spent on system-wide renovations and two new engineering buildings at North Carolina Agricultural and Technical State University and North Carolina State University.
The bill passed the Senate 27 to 13 and now moves to the House, where its passage faces greater uncertainty, sources said.
North Carolina needs to close a $1.4 billion deficit for fiscal 2011, according to the Center on Budget and Policy Priorities. Lawmakers are working on changes to the fiscal 2011 budget that was approved last year under the state’s biennium budget. The fiscal year begins July 1.
Some Republican senators voted against the bond bill because it will add to the deficit while the state needs to cut spending. They pointed to a fiscal impact statement on the bill that estimates debt-service costs at $18.2 million through fiscal 2011.
Senate Majority Leader Martin L. Nesbitt, D-Ashville, countered that the $18.2 million is already approved in the biennial budget. Debt-service costs would need to be allocated in out years, he said.
Nesbitt said during a floor debate that the spending on education, especially engineering, is critical to attract businesses to North Carolina. Other senators noted that the spending on community colleges would immediately alleviate a backlog of nursing applicants who need training.
North Carolina has a history of strong education spending. In 2000, voters approved a referendum that allowed the state to issue up to $3.1 billion over time for renovation and construction projects at colleges and universities. However, the Senate legislation does not need a voter referendum.
But as new buildings went up, spending lagged on basic repairs. A March report from the University of North Carolina Board of Trustees showed that infrastructure needs failed to keep up with the university’s 10-year expansion. UNC Chapel Hill has $645 million in deferred maintenance needs, the report said. The Senate’s bond bill includes about $130 million for repairs and renovations.
Scott Hummel, the assistant vice chancellor for business and finance at North Carolina A&T, said his university just completed projects financed by the 2000 bond package. A&T would receive $104.4 million for an engineering building in the pending bill.
“Many of the campuses have been transformed” by the proceeds from the 2000 bond deal, he said.
State universities faced severe cuts in the fiscal 2010 budget, Hummel said, and he expects additional cuts next year. Federal stimulus funds were used last year to pay faculty salaries.
He said A&T would likely issue any bonds appropriated by the legislation through the UNC system, but schools have the option to issue on their own.
Hummel said House members are “more skeptical” of the bond bill. A June 2 version of the House fiscal 2011 budget cuts all state education spending by 3.1% from the approved biennial budget, including about $147 million from the UNC system. Community college spending would increase, but it includes tuition increases.