By approving the Connect NC bond, North Carolina voters made a strong statement about their vision for the future. After years of hearing many state politicians belittle the role of public investment in building a strong economy, it wouldn’t have been surprising if a majority rejected the bond question, believing it to be just one more example of government “sticking its nose” into the workings of the economy.
Happily, that false narrative did not prevail because North Carolinians know we are all in this together – that without good roads, state-of-the art educational facilities, and safe water the state will fall behind. They demonstrated support for the bond and in so doing the bipartisan group of leaders who moved forward with pragmatic solutions to our state’s challenges in strengthening the economy for everyone and every community.
Given the bipartisan agreement that made the bond successful, it is time to reaffirm our commitment to make those public investments lasting and deliver the greatest benefit to all.
To fully realize the benefits of building the infrastructure of opportunity in communities across the state, it will be critical to ensure there is the ongoing support to make these investments work for those communities. It is therefore essential that we have an adequate state tax code that can meet the needs of a growing and changing economy and maintain the bond’s initial investment.
When the General Assembly returns to Jones Street next month, lawmakers will face an important decision that will speak to whether they are listening to voters or not. If they put forward a fiscally responsible plan to pay the interest on the bond in future years, that will be a hugely encouraging sign. But if they choose to meet the debt obligation by taking resources away from other areas of public investment – from our children’s education, our seniors’ health, our entrepreneurs’ potential to start up a new businesses, our communities’ ability to celebrate their arts and culture – then legislators will be compromising the state’s future and rejecting the clear message in voters’ approval of Connect NC.
What would a fiscally responsible plan look like? For starters, it would mean putting the brakes on further state tax cuts.
Not only would more tax cuts reduce the revenue available for needs not covered by Connect NC, they could also increase the cost of borrowing by causing the financial world to question the state’s the commitment to manage its money prudently and, quite possibly raise interest rates.
After all, sustainably financing the bond requires maintaining a tax code that recognizes the importance of meeting public needs and keeping a healthy reserve. It means abandoning the failed notion that cutting taxes somehow increases revenues or strengthens the economy. In the end, public investment in infrastructure and other building blocks of broad prosperity is a much wiser course than tax cuts that are failing to deliver economic returns.
With the voters’ strong statement yesterday that public infrastructure is important to them, policymakers can now focus on the most effective tools for building an inclusive economy – not myopically looking to income tax cuts for the wealthy and large, profitable corporations. Instead, it is time to use tools that support rural economic development and strengthen regional assets to spur new ideas and new opportunities through public investment.
Voter approval of Connect NC was a great start. North Carolina needed to fund infrastructure across the state to improve the quality of life, build the foundations of a stronger economy and create good jobs. Investing in infrastructure puts people to work in jobs that pay well. After a recession and years of tax cuts, North Carolina now invests a smaller share of its state economy in public infrastructure than it once did, so reversing the decline is important.
The long-term benefits are clear. Major public investments can help attract even greater private investment, as the success of the Research Triangle Park has proved for decades. And, investing in research and development infrastructure can leverage innovation to create entirely new markets, and attract talented people to our state. Public infrastructure investment can also protect North Carolinians from harm. The lessons of Flint, Michigan are clear: eroding infrastructure and cost-cutting measures can drive up costs elsewhere and threaten the health and safety of children and families.
The bond itself won’t address every community need or enable the state to make the next generation of infrastructure investments in broadband and regional public transit, for example, to connect the urban core to suburban and rural areas. It will, however, restart an effort to build an economy that works for everyone and every community through public infrastructure — one that has been ignored for too long. Let’s not stop there.
Alexandra Forter Sirota is the Director of the North Carolina Budget and Tax Center.