North Carolina state officials approved the issuing of $700 million in bonds Oct. 6 to support road construction and repairs.

The 10-member Council of State unanimously passed a resolution that initiates the Build NC bonds sale, part of a $3 billion transportation package approved by the General Assembly in 2018.

The bonds were approved despite a record of overspending by the North Carolina Department of Transportation (NCDOT).

The agency has overspent on construction and maintenance by $2 billion and maxed out its Highway Trust Fund by $1 billion since 2019, State Treasurer Dale Folwell said. A recent state audit also found the transportation department overpaid employees by $40 million.

"We think that long term this is going to fulfill our obligation to the Build NC legislation, as far as the issuance of bonds and, more importantly, filling the responsibility that we owe to the road users, to taxpayers and, of course, to the vendors who have been suffering over the last two years because of overspending at NCDOT," Folwell said.

NCDOT has entered into a legal agreement with the state treasurer's office, the budget and management office and the state controller's office to ensure oversight and accountability during the Build NC program, scheduled to cover transportation projects over 10 years.

"These transportation funds will meet immediate road construction and repair needs in North Carolina communities, serving regions that have faced real uncertainty about the future of projects that are critical for their schools, businesses and neighborhoods," said NC House Speaker Tim Moore, representing Cleveland County.

Borrowing money through bonds allows the state to spread the costs across multiple years instead of breaking into cash flow or current revenue to cover the project expenses. North Carolina continued its bond issuance amid the economic downturn caused by the response to the COVID-19 pandemic because of its AAA bond rating from all three bond rating agencies. An AAA bond rating allows the state to finance debt at the lowest possible interest rates.

In addition, voters in Mecklenburg County will be asked to decide on a ballot measure in the November election to increase taxes so the county can receive $102.73 million for transportation projects in the Charlotte area.

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