Bonding for UNC
Posted on Oct. 20, 1993From the University Report (published by the GAA 1970-94)
“It is sound public finance, and recognized as such by the bond-rating agencies, to borrow for worthwhile capital projects. North Carolina, with its very low debt currently, has the borrowing capacity to take on the proposed new debt in the Nov. 2 bond referendums. Because the debt service on those bonds will be a tiny percentage of the overall state budget, state taxes should not have to be raised to meet payments of interest and principal.” — State Treasurer Harlan E. Boyles ’51
On Nov. 2, North Carolinians will vote on four public-facility bond referendums:
- $310 million of University Improvement Bonds
- $250 million of Community College Bonds
- $145 million of Clean Water Bonds
- $35 million of State Parks Bonds
The N.C. General Assembly overwhelmingly approved putting these referendums on the ballot with only one dissenting vote. Now is an excellent time to sell bonds. Interest rates are at their lowest levels in more than two decades. This is also an economical time to build. Bids should be favorable, reflecting contractors’ eagerness for business. North Carolina’s debt is low. On a per-capita basis, it stands at $104 for every state resident. Thirty-seven of the 50 states have at least twice that much debt per capita. Because our debt is so low, issuing bonds will not harm North Carolina’s excellent credit rating. Our state is one of only four in the nation given the highest rating (triple A) by Moody’s, Standard &. Poor’s, and the Fitch ratings services. The high rating keeps the state’s borrowing costs low.
The projected debt service (payments for interest and principal) on all the proposed bonds would likely be less than 1 percent of the state’s General Fund budget. Last November Virginia passed $600 million of bond referendums for universities, community colleges, parks and other uses by margins greater than two-to-one. (The higher education bonds passed three-to-one.) The bond proceeds will be used for investment in North Carolina’s economic future and to improve the quality of life in our state for many years to come. None of the money can be used for operating expenses.
The UNC System had pressing capital needs before the state was beset with budget problems in 1989. For three years thereafter no ground was broken on a UNC System building financed with state appropriations. In 1992 funds were finally appropriated for three badly needed new buildings, with funding for two more in the 1993 session. In dollar terms, the total appropriated during this five-year period for new construction was $75 million, whereas the capital needs presented by the UNC System Board of Governors since 1989 totaled $644 million. Since 1988, enrollment at the 16 UNC campuses has grown by some 16,400. Today, lack of capital for expansion and modernization threatens to diminish the University’s role as a magnet for industry. Passage of the $310 million bond referendum should create more than 11,000 new jobs.
Carolina alumni and friends have a wonderful opportunity to work with alumni of other UNC System campuses in their communities to advance our support for a bond issue. The case is one that can and should be made and one that Carolina alumni can advance, confident that in doing so not only are we helping our own University but that other UNC System campuses will also benefit.
Let’s all bond for UNC!
Yours at Carolina,
Douglas S. Dibbert ’70
Bond Recap
School of Business Administration Building ($13,490,900)
The Kenan-Flagler Business School has far outgrown Carroll Hall, last renovated 20 years ago, and is now scattered among four locations that lack the infrastructure to handle the computer technology employed. The total estimated cost of the new facility is $26.5 million, of which $3 million has been appropriated and $10 million pledged from private sources. The remaining $13.5 million is anticipated from the bond issue. The private pledges are conditioned on the state’s matching the gifts.
Lineberger Cancer Research Center Addition ($8,119,900)
In the short time since its establishment in 1975, the Lineberger Cancer Research Center has distinguished itself nationally and internationally for the contributions of its scientists and doctors in the fight against cancer. This expansion would house the Clinical Research Program, which conducts studies of the causes of cancer, develops new treatments and speeds transfer of therapies from the laboratory to hospitals and clinics. It would also expand space for specialized AIDS projects that relate to basic cancer research.
Carolina Living &, Learning Center for Autistic Adults, Phase IT ($1,190,400)
The center provides an agriculturally based living and learning environment for people with autism and serves as a training site for students in psychiatry, family medicine, special education, rehabilitation counseling, psychology, occupational therapy and social work. This phase would add a residential unit for 10 patients, a potting shed, greenhouse and barn.
Addition to the School of Dentistry ($8,887,100)
Clinic space in the School of Dentistry is far too limited for the more than 60,000 patients served each year. Facilities are not only overcrowded but also lack adequate equipment-support systems and environmental controls. This three-story addition would provide the modem patient-services facilities required for the teaching and research activities of the School.
Area Health Education Centers Construction Grants ($3,370,800)
AHEC is a nationally acclaimed network of nine regional centers that provides education and training for medical students and health professionals across North Carolina. The AHECs are a bridge among the state’s four university medical centers (UNC, East Carolina, Duke and Wake Forest) and community hospitals, health agencies and health-care providers. The $3,370,800 sought in the bond issue would be used to improve AHEC facilities near hospitals in Nash, New Hanover, Pitt, Cumberland and Buncombe counties. In addition, funds would go to hospitals in which AHECs are located in three counties: Carolinas Hospital (Mecklenburg), Moses H. Cone Memorial Hospital (Guilford) and the Wake County Hospital. Finally, facilities will be improved in Forsyth at the AHEC at the Bowman Gray School of Medicine of Wake Forest University. The funds would be supplemented by more than $4 million in local funds.
