RALEIGH — State Treasurer Janet Cowell wants the legislature to referee a fight with Gov. Bev Perdue’s administration over the funding for Interstate 485 in Charlotte – along with the bigger question of who controls the state’s credit card.
Cowell is asking lawmakers, when they return in May, to clarify whether state agencies can enter into debt under a law passed in 2008. Department of Transportation officials have said that statute lets them use a new financing mechanism, an installment plan, to pay for finishing the interstate loop around Charlotte, but Cowell argues that agencies can’t go around running up the state tab on their own.
She wants the legislature to say whether the treasurer should be the only person who can issue an IOU from North Carolina, she said in an interview Wednesday.
“It’s up to [the legislature] to look at it,” Cowell said during a telephone interview from Seoul, South Korea, where she is meeting with state pension fund managers about Asian investments. “It’s my obligation to raise my hand and point this out.”
The dispute could change the scope and strength of the powers of the treasurer, who is elected independently. It also puts Cowell at odds with supporters in Charlotte and with Perdue, a fellow Democrat.
Perdue spokeswoman Chrissy Pearson emphasized that Cowell’s request will have no effect on I-485’s completion.
“DOT tells us they’ll be considering a short list of contractors very soon,” Pearson said.
Cowell is turning to the legislature after losing one round. Attorney General Roy Cooper’s office said last month that the I-485 financing plan is legal. Cowell said that doesn’t mean it’s the most prudent or efficient way to pay for the road.
Uncertain prospects
The legislature may not prove any more sympathetic. The chief sponsor of the law being debated, Democratic Rep. Nelson Cole of Reidsville, has said that the I-485 plan is an example of precisely how the statute was intended to work.
“My language in the bill was about as simple as it could get,” Cole said Wednesday, adding that he doubts the House will take up Cowell’s request in this year’s short legislative session. “Who’s going to carry the water for her?”
Rep. Becky Carney, a Charlotte Democrat and co-leader of the House Transportation Committee, said the legislature had already weighed in on the funding question when both the House and Senate passed the law.
“It’s clear what the intent was,” Carney said, “allowing the maximum flexibility for financing roads.”
The disagreement is festering just as Cowell released a report warning that the state can’t afford to borrow any more money to build roads or buildings for the next five years if it wants to keep its top credit rating.
Perdue’s plans
Perdue announced plans in November to build the last five miles of I-485, an irritant for years for Charlotte officials who were frustrated that the state left its largest city with a highway loop that looks like a doughnut with a bite missing. She was under pressure after promising months earlier that construction would start by year’s end and then having to back away from that pledge.
Under the new financing plan, the construction company or companies selected will finance $50 million of the $340 million costs, and the state will pay them back over 10 years.
Cowell, who oversees the issuing of debt and how much debt the state can afford, said the plan sets the precedent of an individual agency obligating the state to a debt with no oversight from her office or any other “financial body.” Cole countered that the law he wrote provides an additional tool to pay for roads at a time of growing need and declining revenue.
Cowell’s office on Tuesday released the annual debt affordability study, which warned that the state can afford to borrow only $9.1 million for each of the next five years to build roads and buildings if officials want to remain within self-imposed limits necessary to keep North Carolina’s top bond rating. The AAA rating allows the state to get the best interest rate on bonds, an advantage held by only six other states. The $9.1 million is little more than cushion for error in the context of a $6 billion debt load.
North Carolina, however, still has $1.9 billion in debt that has already been authorized and is available for other construction projects, Cowell said Wednesday.
Our Eyes Are On The Water! 