June 8, 2016
FOR IMMEDIATE RELEASETreasurer Cowell Calls on Legislators to Oppose Debt-funded School Leasing Bill
Raleigh, N.C. -- State Treasurer Janet Cowell today voiced opposition to Senate Bill 554, “School Building Leasing Reform.” In a letter to members of the General Assembly, Cowell expressed the Department of State Treasurer’s concern regarding the policy changes and significant debt burden allowed by the bill.
“Senate Bill 554 is not a technical or local bill—it has major statewide implications for education and tax policy that warrant deeper scrutiny before such changes are considered,” wrote Treasurer Cowell. “Funding for education is our biggest fiscal issue and one that we should not take lightly. We have more needs than funding, but as we know from the Great Recession, risky financing methods and taking on more debt than you can afford can have disastrous consequences.”
Among the concerns listed in her letter, Senate Bill 554 would:
- Allow state student and teacher funding (the average daily membership) and all other state education funding to be used for school facilities, in this case to pay private developers.
- Allow counties to take on more debt than they could afford, endangering their creditworthiness and limiting debt capacity to meet the eventual needs of its police, fire and rescue, or jails.
- Allow private developers to be paid before essential county services, even in times of emergencies or economic distress.
- Permit a local unit to refund a private for profit business entity for expenses incurred in operating the building from local sales or use taxes.
- Exempt a governmental entity from submitting an operating lease to a competitive bid process.
The bill was referred to the Senate Committee on Education/Higher Education and is scheduled to be heard at an upcoming committee meeting, possibly as early as Wednesday, June 8.
###View Treasurer Cowell's letter to the North Carolina General Assembly