There was a front-page article featured in the Technician on Thursday regarding the upcoming bond referendum on March 15 this year. If approved, North Carolina would sell $2.85 billion in bonds, $165 million of which would be allocated to NC State. The article described the amount of money our school may receive and how it may be used by various departments, but fails to acknowledge the downsides. After using most of the article to create hype for all the free money, the only information regarding opposition to the bond referendum was a mention of fiscally conservative Republicans who may be “scared off by the sticker price.”
This is an oversimplified generalization offered only in an attempt to discredit the opposition as mean, old conservatives. I’m certainly no Republican, but these types of sophist arguments and stereotypes drive me up the wall. There are a few good reasons to vote against the bond, and since the article on Thursday made no real attempt to impartially present the pros and cons, I will share the other side of the story with you.
Bonds are essentially loans. The state will sell the bonds and use the money, but the catch is that we have to pay back all that money with interest. It isn’t free. If the referendum passes, we will be consuming goods and services in the present at our expense in the future. Selling bonds generates liability. Imagine getting extremely drunk at a party, having a lot of fun and waking up the next day with a massive hangover. You would probably regret not respecting your limits. The difference here is that North Carolina will be paying this off for 20 years. That’s a very long hangover.
If the state could pay for the things it wants right now, we wouldn’t have to sell bonds and generate liabilities. I worked in the Senate briefly while I was in high school during the annual budget circus (the worst show on earth), and I learned that North Carolina has a balanced budget amendment in its constitution. This means simply that expenditures cannot exceed total income. The bond referendum is just a political move to pump more money into voters and make everyone happy without illegally going into debt. The legislature and our governor are purchasing your political support, and they are financing this purchase with liabilities.
Please think about what this would mean before you vote. If the state can’t pay for it now, how do you expect our legislature to come up with the money when it has to start making payments on the principal and interest over the next 20 years? That extra money every year has to come from somewhere, and I’m very skeptical that our state legislature will resist raising taxes during that time. They will be forced to pull money from elsewhere to pay off these bonds, and if the budget gets uncomfortably tight, a tax increase will be a very tempting option. There is also the possibility that our state government could suddenly figure out a way to produce value and earn money without having to coercively collect it from us, but this is, in my mind, far outside the realm of possibility. Politicians love financing projects with debt because they can buy votes while deferring payments (and the decision to raise taxes) to people in the future. As a country, we’ll have to pay off $19 trillion worth of “free money” that has been used. Does it make sense to add to our debt on a state level?
I’ll leave you with a plea for thrift. By voting for this money now, you are obligating all of our future selves to pay this amount back in full plus interest. It is not free, it does not facilitate a sustainable attitude toward state financing, and it shouldn’t even be legal since it’s essentially putting the state into debt. This is nothing more than a shameless attempt by contemptuous politicians to garner political support by spending money we don’t have. See through the propaganda and the free stuff; don’t contribute to the debt crisis.
