Alternative Solutions To State Bond Issue On March Ballot

By / Letters to the Editor / Wednesday, 24 February 2016 00:00

Dear Editor,
In a previous letter I explained the NC Bond issue being voted upon as part of Primary Day. Further, I explained my rationale for not supporting the Bond and urged you to join me in voting against it on Primary Day.
In summary, I pointed out there were no funds in the proposed $2.2 Billion Bond for Roads, Bridges or even repairs to our K-12 School system buildings. In addition the majority of the Bond funding is proposed to new construction on College/ University campus sites. I also pointed out the majority of people think the bond will build new roads/ bridges which I the exact opposite of what is being proposed. In addition, though it promises not additional taxes to pay off the bond, there is no way this Administration and Legislature can guarantee the action on taxes of future Governors or Legislatures. In addition, I pointed out the timing of the vote to be suspect. Normally this is done as part of the General Elections in November where almost twice the NC voters participate.
I am doing a second letter for two reasons. One is the importance I place on defeating this issue. Secondly, it is my belief you should always offer alternative solutions to accomplishing the same goals. Something I could not fully address in last week's column.
My first recommendation is reallocation of State Funds. The State reported a revenue increase in 2015 of about 6%. In fact last year, to Republican Credit, they ended the year with a $445 million surplus. They could eliminate the bond and fully fund those projects over 5 years if they chose to dedicate the surplus to these projects. Understanding it is good practice to put some money away "for a rainy day", if they saved about $150 million a year for that rainy day, they could still fully fund these projects in about 7 years. Goal reached without adding to our debt.
My second recommendation is Universities and Colleges use their endowment funds to do this work over time. Endowments are defined as money or other financial assets that are donated to universities or colleges. The purpose of the endowment is to invest it, so that money will continue to grow. Universities can then draw on part of that endowment for their needs to operate the system. Most endowments have guidelines that state how much of each year's investment income can be spent. For many universities, this amount is about 5% of the endowment's total asset value. For example, if your endowments are over $2 billion, using the 5% rule, the University can use about $100 million annually. If a system has $70 million in endowments, they could use $3.5 million annually for these projects. As endowments from alumni increase, so does the available money. Since the endowment money is invested, it can be expected to replenish at that rate.
Many of you are now thinking two thoughts. That is a lot of money to spend and do our post secondary systems have that type of endowments?
On the 2nd thought, I will submit to a partial list from The College and University Endowment Funds 2015 Edition, listing endowments from 2014.
UNC Chapel Hill over $2.3 Billion
NC State over $769 Million
UNC Greensboro - over $221 million
UNC Charlotte- over $148 million
East Carolina- over $144 million
UNC Wilmington over $73 million
Western Carolina- over $56 million
A&T State- over $37 million
UNC Ashville- over $32 million
Winston Salem- over $29 million
Keep in mind I am only reporting Public Universities as the private ones are not covered in the Bond. Granted not all colleges have endowments but those that do should use these funds for their projects.
I hope you agree I have made the case not to support the Bond. Remember the Bond vote is March 15th and is part of the Primary voting. Early voting will start shortly. VOTE
William Moore
Kure Beach

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