A bill giving voters a chance to authorize a $1.9 billion in bonds to be used for school construction was presented to the House Education K-12 Committee on Tuesday, May 16. Rep. Craig Horn, (R-Union) chaired the committee, and is also a sponsor of the bill.
The intent of the bill is to help school districts, especially smaller rural counties, many of which are deemed low-wealth, with school construction costs.
Rep. Linda Johnson (R-Cabarrus) primary sponsor of the bill, explained the bill to the committee. Johnson said that HB 866, “Public School Building Bond Act of 2017” would place a referendum on the November 2018 election for voters to decide on the issuance of $1.9 billion in bonds the state would sell for the purposes of school construction.
The bill requires some counties to match the amount they receive from the bond sale proceeds according to a formula. Johnson said, “Low wealth and small counties would not require a match.”
“This bill is based on our last bond that was passed, and that was 21 years ago,” Johnson also said. “Normally 10 years has been the gap between our bonds. I don’t know how we’ve made it 21 years. I do believe it’s time we assisted our public schools.”
The bill authorizes the State Treasurer’s Office to issue and sell general obligation bonds designated as “State of North Carolina Public School Building Bonds.” The total principal amount of the bonds issued is not to exceed $1.9 billion dollars. In any 12-month period the principal amounts of bonds or notes issued shall not exceed $591 million dollars.
From the NC Department of Public Instruction, Dr. Ben Matthews and Dr. Ken Phelps told the committee that Superintendent of Public Instruction Mark Johnson fully supports the bill, as does the State Board of Education.
Rep. Jimmy Dixon (R-Duplin) commented to the committee that the education lottery funds had not been distributed properly according to the original legislation, which authorized it, a practice he said occurred under the Perdue administration and was continued by her successor.
Dixon said, “According to my calculations, the local school systems should have received an additional $648 million that they did not receive.”
Johnson addressed Dixon’s comments and said, “It seems that when the lottery bill was passed, that it was a panacea and was sold that way. But it was not a panacea, and our growth and the recession has caused a lot of this. And that goes for both parties when both were in control. We’re all equally responsible, but we’re also responsible to help.”
Leanne Winner of the NC School Boards Association told the committee that her organization, along with the education and design build industry, strongly supports the bond issue.
Also, responding to Dixon, she said that even if the lottery were used as it was originally pledged, it would take 40 years to meet all the needs that the public schools have right now.
“Those needs have been compounded already this legislative session by the enactment of the K-3 class-size reduction which will begin this coming school year, and then be fairly substantial the following school year,” Winner said. “We are in the process of surveying districts right now to find out what their capital needs are for that portion.”
She said that many school districts are saying they need multiple school buildings to accommodate the growth they have had in recent years.
Winner also said, “The economic impact that this bond will have across the state is substantial. It is the one type of bond issue that you can pass that will put dollars in all 100 counties of the state.
“For our poorer counties, it will provide an opportunity to provide a major piece of educational and technological infrastructure that will help make communities across this state more attractive for economic development.”
Mark Richardson of the NC Association of County Commissioners said passage of this bill is the organization’s top goal of this legislative biennium. He noted that smaller, rural counties cannot get enough from their sales taxes and property tax bases to make a dent in their educational needs.
Superintendent Chris Lowder and Tim Lowder of Cabarrus County Schools addressed the committee, saying they were representing larger school districts. Superintendent Lowder said the district has 32,000 students currently, and that number is growing at a rate of 1,000 students per year, a surge projected to keep growing at that rate over the next 10 years.
He also said the capital needs in Cabarrus County are close to $800 million over the next 10 years. Tim Lowder, executive director of operations in the district’s construction department, said enrollment is growing especially in the higher-grade levels in Cabarrus County, and that high schools are more expensive to build.
Dr. Frank Till, superintendent of Cumberland County Schools, said class-size reduction would cost $7 million next year, which his district does not have. He also the district has needs for hundreds of millions of dollars in renovations, modernizations and new construction, and that a recent discovery of a lead problem in their schools has added to the cost of construction and capital outlays.
Michael Bracy, superintendent of Jones County Schools, said that even though the bill is 21 years late, it will be an economic driver for the state. He said his school district is ranked number two in the state with the lowest tax value, one cent bringing in $83,000. He challenged the committee to do the right thing for the students and keep them in mind when considering this bill.
The bill was passed by the committee on a voice vote and will next be heard in the House Finance Committee.