Connect NC would spur economy, create new jobs
Published March 1, 2016
by Rob Schofield, NC Policy Watch, February 29, 2016.
New report finds state borrowing through Connect NC Bond Act could boost economy, create thousands of jobs
Voters in the North Carolina primary will have the chance to approve a state bond that could boost North Carolina’s economy in the short run and make the state more competitive for the long haul.
Investments as a result of the Connect NC Bond Act are needed more than ever, according to a new report from the Budget & Tax Center, a project of the North Carolina Justice Center. Connect NC, which will appear on the ballot on March 15th, would issue $2 billion in new debt to finance public infrastructure across the state. Construction activities funded through the bond could create 5,000 jobs over a five-year period, and put almost $1.5 billion into the pockets of North Carolina workers and business owners – earnings that could help boost local economies, as working men and women purchase basic goods at community businesses.
“The Bond Act comes at a time of need,” said Patrick McHugh, BTC economic analyst and author of the report. “Much of our existing infrastructure is falling into disrepair, and we have scaled back investments in our long-term competitiveness, so the Bond Act would be a step in the right direction.”
The $980 million made available by the Bond Act would make possible construction projects across the UNC system, in addition to badly needed funds for local water, sewer and park infrastructure, the state park system, the North Carolina Zoo, North Carolina National Guard, and the Department of Public Safety.
Many of these areas are in dire need of repairs and expansion, and public infrastructure investment is long overdue, the report said. After a recession and years of tax cuts, North Carolina now invests a smaller share of the state economy in public infrastructure than it once did. Although there will still be a backlog of repairs and maintenance that will need to be addressed even if Connect NC passes, projects financed by the bond will create good, middle-class jobs.
Ultimately, the Connect NC Bond will require long-term funding commitments, the report said. North Carolina has the capacity to shoulder the new debt, but payments will be on the state’s ledger book for a long time. Capturing the economic benefits of the Connect NC Bond will hinge on whether state leaders allocate adequate funding to use and maintain the new infrastructure.
“After years of dwindling state investments, the bond will not solve all of the North Carolina’s infrastructure needs, so we can’t sacrifice other important projects to pay for the bond,” McHugh said. “However, a long-term commitment to funding public infrastructure can grow our economy and make North Carolina a better place to call home.”
Read the full report at this link: http://www.ncjustice.org/?q=budget-and-tax/btc-reports-connect-nc-jobs-infrastructure-investments-can-build-economy-works-all
March 1, 2016 at 10:16 am
Norm Kelly says:
Just from the headline, I'm not expecting a lot from this post. Somehow government spending always improves the economy. But the bigger question is which spurs the economy better/more: government spending or private sector spending?
Let's start with an analysis of government spending. Granted, I don't have a doctorate in either micro- or macro-economics. So this may come from the standpoint of common sense or experience instead of theory.
When government spends money, how does the process work? First, government has NO MONEY of it's own. In order for the government to have money to spend, it first TAKES that money OUT OF THE ECONOMY. Once government has removed money from the economy, government then filters it through the bureaucracy, agencies, levels of management, overhead, etc. etc. etc., so that SOME of the original money is spent in specific areas of the economy. With government spending, it's always a PORTION of the money that is returned to the economy. And it's always targeted spending, not general spending.
Now, let's look at private sector spending. This is you & me. This is the local hardware store buying inventory. This is the local home improvement contractor buying supplies for your project, being paid to do work. This is a company in Morrisville needing more space, so they lease a bigger building, do the upfit, paying all kinds of contractors to prepare the new space, movers to pack & move equipment to the new location, and possibly hiring more people to fill the new, expanded space. This is money flowing through the economy, paying multiple people to perform work, equipment being bought, and generally spurring the economy in multiple areas. People in multiple 'trades', businesses in multiple trades, creating economic activity without the drain of bureaucracy. No money TAKEN from anyone to cause the economic activity. All money freely and voluntarily traded for work performed. All of the money actually going to spur the economy, with virtually no waste. And taxes paid to government at every step of the process.
So, the bond was originally proposed and sold as one for needed road & bridge maintenance & repair. Colleges & universities could be taken care of with normal budgetary spending. But to claim that this government spending is different from other government spending, that it would spur the economy MORE than not taking this money out of the economy is a bogus, pointless, used, tired excuse for government spending.
But, then again, if one remembers that food stamps actually spur the economy, one MUST accept that all government spending is good government spending. Since ALL government spending is good for the economy, and roads & bridges aren't necessary, I guess I'll have to vote FOR the bond too. No sense in bringing thinking ability into the voting booth with me. After all, if I stop thinking and start 'feeling', I can vote for Hillary also!
March 3, 2016 at 9:12 am
bruce stanley says:
Norm Kelly, Excellent differentiation explanation between public and private sector spending!
I view this bond, since it consists of no road or bridge work, to be a sneaky way for politicians to convince voters to allow them to spend taxpayer money, and many of the voters are not taxpayers. It's the taxpayers who are required to pay the money back to the bond holders.
March 1, 2016 at 11:04 am
Richard L Bunce says:
Of course NC Policy Watch supports a gilded government hamburger today for significant commitments of taxpayer funding for the next 30 years when most of that spending will be proven to be a waste...
March 1, 2016 at 11:36 am
bruce stanley says:
Maybe, but do we want to be adding jobs by increasing debt? There are better ways to generate jobs, namely through creating a healthy business environment for the private sector.
