2 THE NEWS-JOURNAL
Raeford, N.C..
Octobor 20,1993
Viewpoints
Vote for university bonds
Every now and then my editors let
me write about my job—working for
the 16 campuses of the University of
North Carolina. Sometimes they let
me write about things about my job
that are fun — or funny. Sometimes
about more serious matters.
Today, it is serious.
Early next month — on Tuesday,
November 2, to be exact — we go to
the polls to vote on a package of state
wide bond issues. The bonds would
fund the construction of capital facili
ties for community colleges, clean
water projects, parks, and our 16 uni
versities.
For the past few months, 1 have
been spending a lot of my time giving
information and advice to people cam
paigning for the passage of the bonds,
especially the University bonds. And 1
have gotten lots of questions.
A basic question is “Why borrow
money now?’’ There are several gocxi
reasons to use borrowed money to
finance needed capital improvements
at this particular time. Here are just a
few.
*The cost of borrowing is lower
than it has been in years. Interest rates
have dropped unbelievably. The other
day somebody told me about public
bonds selling at interest rates of less
than three percent.
*Construction costs are also very
low. Why? During the last few years
the construction business has suffered
during the bad economic times. As a
result, many of contractors are hungry
for work. So, needed facilities can be
constructed for a much lower cost
today than in the future. When the
economy has recovered and there is a
new construction b(X)m, the cost of
buildings will go sky high.
*North Carolina’s good credit rat-
, One on One
D. G. Martin
ing (the best possible) makes it pos
sible to borrow at the lowest interest
rates available. But ourcredit rating is
not automatic. It needs to be pro
tected. The New York financial fimis
that give out these ratings have w arned
us that North Carolina is not investing
enough in income generating capital
projects — such as education facili
ties. Sometimes, they say. you have to
borrow to invest, if you are going to
be able to stay in a fiscally sound
position.
All that is well andgcKid. But some
people are reluctant to approve the
borrowing of money or the issuance
of hmds unless they get good assur
ance about two things; (1 )The money
is going to address specific and genu
inely neededfacilities.(2)Taxes won’t
go up.
The question about need is pretty
easy to address. On each university
campus the facil ities to be constmcted
or renovated are identified specifi
cally. And on each campus these fa
cilities are the most needed of a group
of much needed projects. At East
Carolina, for in.stance, the current li
brary is so crowded that many books
have been sent to off-campus storage
facilities. Meanwhile, students crowd
into inadequate space to study and do
research.
At UNC-Charlotte, student body
growth has outstripped the ability of
the university to provide cla.ssroom
space for all the clas.ses the kids need
to graduate. At Fayetteville State, an
cient dormitories are unsafe and unfit
for that growing campus. Every cam
pus needs similar projects to help it
provide the funds for new facilities
during this time.
Without new facilities the Univer-
.sity can’t continue to grow. If it can’t
grow there won’t be a place for the
increasing number of North Carolina
young people who are qualified to go to
college.
Yes, the need for these facilities is
real — very real.
What about taxes? Taxes won’t have
to go up to pay for the bonds. That is
what the experts say —including
Harlan Boyles, our fiscally conserva-
ti\ estate Treasurer.
How is it possible that you can spend
money without raising taxes? In part,
because the bond’s annual payment
.schedule is a tiny fraction of the pro
jected growth of state revenues—pro
jected without any tax increases. Also,
the economic activity generated by the
bonds and the increased earning poten
tial created by the growing number of
better educated graduates will boost
the total revenue of the state.
People have a tough time believing
that their taxes won’t go up. But no
body has come up with real facts or
reasoning to challenge Mr. Boyles.
On the other hand, some people who
are really worried about taxes have
studied the matter in even more detail.
They are now convinced about the
economic generating potential of the
investments to be funded by the bonds
— so much that they believe that the
best way to keep taxes as low as pos
sible is to vote for the bonds.
However you see it, don’t forget to
vote on November 2.
Lxtters
Don’t bulldoze
Turlington Gym
To the Editor;
As a taxpayer of Raeford and Hoke
County ,1 hate to see a valuable facil
ity go to waste — namely the
Turlington Gymnasium. To see this
building go to seed in these times of
shrinking recreational budgets is
wasteful.
To see the evidence that a recre
ational complex is needed and
wanted by the taxpayers of Raeford
and Hoke County, all one has to do
is drive by te new walking track at
McLauchlin Elementary andste the
citizens utilizing the track at all times
of day and night.
Turlington Gymnasium could be
used for seniors’ indoor walking,
arts & crafts, aerobics, workshops,
indoor tennis, coaches’ training,
music lessons and many other rec
reational needs.
(See LETTERS, page 3)
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day of the publication week.
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More details on Colorado trip
Men over 65 should have a com
plete physical examination each year,
sosaysthedoctor. Personally,! can’t
quanel with their reasoning. How
ever, I would like an explanation for
why I always have pains that I have
never experienced before afterward.
Perhaps it is due to all the gouging
and punching they do. Parts are dis
turbed that should be left alone. Oh
well, on to another subject.
In our great community of Arabia,
located between Hickory Stick and
Knothole, is a Jot ‘em Down Store
where folks who don’t work hang
out. For years we had a loafers club.
It was held together by my little
skinny buddy John D. (dethroned
vegetable king) Black. At present it
has gone to pot because Mr. Black is
not feeling up to par. However, one
A View from
the Country
Raz Autry
member is as frisky as ever —
namely Shoeless Buddy Butler.
Since he was in such great shape I
invited him to accompany me on
my recent trip to Colorado Springs.
Sadly, he turned me down because
he had loaned his only pair of shoes
to someone in the club and couldn’t
remember who. I wasn't about to
take Shoeless to mingle with the
foreigners in Colorado Springs.
Those folks had never seen a bare
footed man before.
My wife has complained for weeks
that 1 left every reader hanging when
1 wrote an article about our trip to
Colorado. I told her it was due in part
because a lady shook me up right
after we came back when she re
marked, “You sure look good for a
man your age.” Nevertheless, to keep
peace in the family, I will bore you
with further details about our jour
ney.
Ireni had our first day in the great
wild west planned. We were going on
a tour. Now I am not much for tour
ing. Instead, I am like the 90-year-old
man, when told by a doctor that he
needed a hearing aid, said, “Forget it,
I have heard enough.” Believe me 1
have loured enough.
I must admit there was an event on
(See AUTRY, page 4)
INSUMnce
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THE ADDED
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TOUR HOME
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EARTHOUAKES,
HURRICANES,
AND KIDS MHO
MATCH BEAVIS
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Timing bad for economic bonds
Remember the old joke where one
guy asks, “What’s the secret to tell
ing a joke ...” and the second guy
interrupts to say; “Timing.”
Well, timing is also the secret
issue behind the votes that will be
cast statewide in November. The tim
ing appears favorable for four bond
issues totalling $740 million, while
timing appears likely to hurt a fifth
vote, that on a constitutional amend
ment on economic development fi
nancing.
It’s hard to imagine a better time
to borrow, given current interest rates.
Voters will decide on four separate
bond issues: $310 million for the
University of North Carolina sys
tem, $250 million for community
colleges, $145 million for water and
sewer facilities and $35 million for
parks.
In the mid-eighties, when former
Gov. Jim Martin was proposing a
number of bond issues that the Gen
eral Assembly rejected, interest rates
were running in the seven and eight
percent range for government bor
rowing. According to the Bond Buy
ers Index, interest rates in 1987 and
1988 were about 7.8 percent.
At those rates, the state would
have faced payoffs of $2 for every $ 1
borrowed. A $740 million issue
would have eventually cost $1.48
billion over 20 years.
The state recently sold $87.5 mil
lion worth of prison bonds at 4.2346
percent interest. Let’s round that up
to 4.25 percent. At that rate, over 20
years, the state will pay back $1.48
for every dollar borrowed.
North Carolina was very fortu
nate to get such a low rate. It’s more
than a percentage point below mar
ket, as reported by the Bond Buyers
Index. North Carolina has a history
of getting lower than market interest
rates, Everette Chalk, deputy state
treasurer-for local government fi
nance, told a business magazine re
cently.
But to be on the safe side, let’s
assume that the state would pay that
extra point for the $740 million in
bonds that it would begin to issue
next spring. At an interest rate of 5.5
percent, the state would pay back
$1.66 for every dollar borrowed, or
$1,228 billion. That’s still well be
low the mid-eighties cost.
Those who oppose the bonds can
argue that they oppose any borrow
ing, or they can argue that the facili
ties aren’t needed, but they can’t
argue with financing costs. In the
mid-eighties, the cost of financing
was the main weapon used against
Martin’s proposals.
But while timing favors the bonds,
it would appear to be working against
what is being called the “economic
development financing” bonds con
stitutional amendment. That amend
ment would appear to be in some
trouble due to the whole sordid
Mercedes deal. These EDF bonds
would provide local governments
with another incentive that they could
offer to new industry.
Public reaction to Alabama’s half
billion dollar incentive package has
been mostly negative, and Gov. Jim
Watching
Paul T. O'Connor
Hunt has been praised in state papers
for not offering more than the $100
million package North Carolina put
up.
At a recent panel discussion on
the EDF bonds amendment. Rep.
John Gamble, D-Lincoln, blasted the
bonds and said that they would lead
to the kind of bidding war among
counties that the states found them
selves in with Mercedes.
Timing is so bad for the EDF
bonds that some advocates of the
bond issues are worried that voters,
who will confront the EDF issue at
the top of the ballot, will reject all
five without giving much thought to
interest rates.
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