The national financial crisis could hold up some school construction projects.
As noted in today's article by David Bracken and Michael Biesecker, Wake County has postponed the sale of $454 million in bonds over the past two weeks. Of that amount, $370 million is for school construction from the 2006 bond.
Wake County Manager David Cooke said the county has enough cash that the delay in selling bonds will not have an immediate effect on projects already under way. But things get tricky if the delay gets too long for borrowing the money.
Right now, the school system is preparing to make its quarterly request in November for the next round of bond money. How the credit crunch affects the construction program remains to be seen.
"It just depends on how long they wait," said Jyoti Sharma, the school system's director of facility planning.
Comments
Postponement illogical
Thu, 09/25/2008 - 11:00 — Kent Misegades (not verified)Generally when there is a financial crisis, investors pull funds from more volatile markets, such as stocks and sub-prime mortgages, and put them in bonds, especially from highly rated municipalities such as Wake County. The current situation should in fact be an excellent opportunity for Wake to offer its bonds, unless the county anticipates going deeply into the red in the near future. This postponement is illogical. Perhaps they await the outcome of bailout discussions in DC and stabilization of markets?
What to do about Wall Street? How about... nothing. These bankers, bureaucrats and loser borrowers got themselves into this mess; let them find their way out. Instead, these Chicken Littles are expecting honest, frugile citizens to pay their debts. Let them go bankrupt! I will bet that they will magically find a way to tighten their belts and make the needed cuts to save their businesses. Same goes for borrowers. When faced with forclosure and returning to an apartment or Mommy & Daddy's home, why not work harder, take on a 2nd or 3rd job, live within your means and pay off your own debts instead of asking your neighbor to do this for you. Lastly, the U.S. government should divest itself of any and all business ownership. This happened since they screwed things up by meddling; ownership by a bunch of pin-headed politicos will only make matters worse, and those of us who live within their means will end up with the bill.
Dadof3 (like me, congrats!) is dead on with his assessment of continued problems at the N&O. If the Editor would stop protecting the government schools and corrupt politicians and end his clear disdain of our President (who won by a strong margin in Wake County, the N&O's market), they might regain their readership. Too bad for Kinea, but not a big surprise. She ought to apply at the Carolina Journal, which has expanded its staff in recent years.
Hmmm.
Thu, 09/25/2008 - 13:35 — Bob_SconceI believe part of the problem is that many of the firms who would otherwise be investing have a liquidity crunch and are holding on to their cash.
I agree with your assessment of pin-headed politicos.
Personally, I would like to see some of these mortgage-backed securities registered so they can be sold on the open market. Bush was right -- even though Wall Street currently values them at next-to-nothing (thanks to the mark-to-market accounting rule), they have some value. Why put taxpayer money at risk when I'm willing to buy some?
Survival 101 (Slight OT Alert)
Thu, 09/25/2008 - 12:57 — shearertwRight onKent
I’m with you, let it all come crashing down. Those of us who know how to live within our means, respect the fact that we have a roof over our heads and don’t expect someone else to pay for it will do just fine. People who have relied on others to take care of them or have never had to eat PB&J for a month will have some difficult days ahead. They to, however, will make it through and when they do, they’ll respect property and property rights again.
Bussing will be fine
Thu, 09/25/2008 - 09:46 — vsheehanThere will be cutting of expenses but not from the bussing. I bet special Ed and AG services will be hit the most. The OT’s are one therapist to three schools already assume they will all have to take on another school each. The new reading specialists will go and probably any funding for extra help for kids not covered by IEPS(SST). Like OT AG services in Wake are far below the national norm but I expect a cut in what AG services there are. I expect the schools with AG classes only to be open up to all students. What happened at Ligon will happen at the other AG Basic schools. Less teachers then. Teacher’s dental coverage will probably go and the medical deductable will increase. While the insanity of putting a kindergartner on a bus for two hours a day will not be touched.
Mr. Hui - Question for you
Thu, 09/25/2008 - 09:28 — Voice_of_Reason_Lisa B makes a good point, who makes that decision? The big question is what was the bond interest rate then and what is it now (or is it variable?)? When we vote for a bond is it customary to drag it out this long? I don't know a lot about this process either. Also, is this true of all bonds?
Bond sales
Thu, 09/25/2008 - 16:08 — KeungHui (author)I'm not the expert on this, but the call is made by the county staff. They're not the only ones who've delayed selling bonds right now due to the state of the economy.
Wake doesn't historically sell all the bonds at once. They're sold over several years to keep the debt payments in line.
And this is the possible train wreck - Start Preparing
Thu, 09/25/2008 - 07:23 — Voice_of_Reason_***Soap Box Warning *** Over the years our school district (and to be fair most) counted on increased revenue due to growth. We have also added more and more onto basic education, in our case BoE policy includes social engineering in the form of "diversity" busing as one of those extras. If we have a downturn in the economy, growth will slow. That growth is not only numbers of children entering the system, it is also tax revenues. If we start experiencing a negative growth rate in tax revenues (I believe we will), we are going to have major problems funding even what have now. The "extras" will need to be prioritized, if we will even be able to afford any. Are we ready to make these tough choices? I don't think this is even being discussed. People will scream on all sides; the affluent will get more vocal and involved when they start asking for more taxes during these times. I am old enough to remember the last big recession, and it isn't pretty. Most of you have never experienced mass boarding up of shops, and high unemployment along with inflation. We have been living the good life for a long time now along with the spending on all the unnecessary extras. I truly hope our elected officials are making proactive plans to deal with what might be ahead. It scares me our BoE will not even talk priorities when the budget is short now. Fiscal responsibility needs to trump all these "nice to have" or little/no-value added extras. ***Off Box***
Agree
Thu, 09/25/2008 - 07:51 — Bob_SconceFully agree.
However, I should point out that the commissioners have a fair bit of say in this -- they fund a number of things that I would put at a lower priority than schools. (Why, for example, is the county subsidizing anybody's housing?)
And that goes for all levels of government
Thu, 09/25/2008 - 08:06 — Voice_of_Reason_The gravy train needs to slow down or we are all in trouble. And the irony is this is going to be a snowball effect since more and more people will join that gravy train. Maybe, (but I doubt it) the politicians will think of the country before the votes they can buy.
Good points, all
Thu, 09/25/2008 - 07:25 — fiestamomOne thing that bothers me about the government (local, state, federal), is that no one EVER gets laid off/fired! If American businesses have to cut back, why does the government not have to do with less? Instead of cutting back on expenses, they just raise our taxes! When was the last time you ever heard a governmental entity say they were reducing their budget?
WCPSS is a perfect example of this. They are still hiring extra bus drivers and paying exorbitant amounts of OUR money for gas. Diversity bussins is getting pretty expensive. How can they justify this?
Hello Fiesta mom
Thu, 09/25/2008 - 09:12 — GT (not verified)Listen...cool your jets a minute!!
First off, Government Spending counts for A HUGE PART of our economy! So they have to spend to spur economic growth. And your taxes have not been raised, YET, anyway...so I'm not sure where you get that from?
Both partys spend MONEY! If you want to make a change...vote bob barr...
GT that is true but it is not all equal
Thu, 09/25/2008 - 18:15 — Voice_of_Reason_I don't agree with frivoulous spending or spending to "buy" voters on either side. Government spending for the "Gravy Train" projects has promoted poverty, not cured it. The problem is as we attack one level of poverty, the next level is dealt with. I don't have a problem with helping the TRULY needy, but not helping them make their life so comfortable that they don't want to contribute to society, only live off it. From somebody that has seen true poverty, the poor in our country for the most part are very well off by world standards.
As for spending money they don't have, I think you would have a problem convincing me that it good for our economy. And waste is waste, it is not a zero sum gain. Taxes whether high or low give about the same revenue stream to the cofers. Lower taxes promote more growth and almost always provide a little more money to the cofers. The trick is finding the rate that is not too low.
PS - Bob Barr is a wasted vote since he has no chance of even competing -- whether you agree with him or not.
my taxes are already too high!
Thu, 09/25/2008 - 15:49 — fiestamomI don't really enjoy all of the governmental spending! Having the government spend money on un necessary bussing, mandatory diversity reassignments isn't my cup of tea.
At the state level, my tax dollars are going to the governor and his wife riding around in a luxurious limo in Italy.
At the federal level: The feds are actually running ads on the radio asking for more people to apply for WIC and food stamps! If they are running out of "customers", why not cut back on the program?
don't know how,but they
Thu, 09/25/2008 - 07:30 — bigwinniedon't know how,but they continue to do so.
Someone should demand a cost analysis, in these economically tough times, of diversity bussing and MYR which doubled transportation costs.
More like Nestle's Crunch!
Thu, 09/25/2008 - 06:38 — g88ky07The borrowing is not the only thing this bunch should be worrying about, the support SIMPLY will NOT be there the next time they want us to support future approvals!
The LYING school board, and ALL its supporters, can beg, plead and cry "borrowing crunch" "growth crunch" and "BS crunch"
BUT,
opposition to future bonds will be a STARK reminder of how, voters, parents, families and our children have been treated by the current LYING, POWER HUNGRY and GREEDY school board!!!
I know Lori Milberg, only complaints and never any pats on the back for you is there. It's just terrible!
lying school board
Thu, 09/25/2008 - 07:15 — HJ2ss2Interesting to read your comment. I think it is safe to say you are disgusted with the constant lies. "Distortion of the truth" is a much kinder phrase but I think lying is more appropriate in this case. It's a systemic problem.
The lying doesn't stop with the school board. It's a quality that's popular with the more "recognized" school administrators. I find this disturbing because they are the ones we entrust with our children. What I find even more disgusting is that their focus is on their own careers rather than what is in the best interest of the students.
The pattern has been repeating itself for years.
OT alert
Thu, 09/25/2008 - 06:35 — bigwinnieI am awfully sorry to see in the paper this AM that Kinea has been let go from the N&O. I wish her all the best.
Best wishes!
Thu, 09/25/2008 - 07:14 — Dadof3Yes, I wish all the best for Kinea and I appreciate all the work she did on behalf of letting us Wake County citizens know as far as what is going on here.
I suspect the education beat isn't as glamorous as others, but boy is it critical.
Now hopefully the N&O will figure out why the blood-drain (hint: bias) so that they don't have to let any others go. I won't be holding my breath.
Best Wishes Kinea
Thu, 09/25/2008 - 06:45 — Lisa_BDitto big Winner. Thanks to Kinea for all she did, and best wishes!
Whose Decision Is This?
Thu, 09/25/2008 - 06:31 — Lisa_BPlease forgive my ignorance here, but when Keung says "Wake County has postponed..." WHO in Wake County makes the decision to postpone the sale of the bonds, and why was that decision made? I've become very informed these past 2 years in anything pertaining to School assignment, but I'm a newbie here. Thanks!