In the private sector, few things will land you in hot water quicker than dipping into someone else’s trust fund to get your hands on cash – we’ve all heard about lawyers who took money out of a trust fund then, in the blink of an eye, ended up disbarred.
The state of North Carolina has what’s called the Highway Trust Fund – a public version of a private trust fund – which has money sitting in it that belongs to taxpayers across North Carolina.
Now, under state law, the money in that trust fund can only be used to do two things: 1) Pay for long-term road building; and 2) In emergencies, when DOT lands in a financial jam, for loans to bail DOT out.
However, those loans can only be made with the approval of the State Treasurer. He’s the Keeper of the Public Purse.
Two years ago, after Governor Cooper was elected, DOT went on a spending spree – it spent $1.8 billion it had in the bank, borrowed $300 million (using bonds) more. As part of all that, the Governor’s folks borrowed $1.1 billion from the Highway Trust Fund and spent it.
What did the Treasurer say about that loan? Nothing. DOT just raided the trust fund without his approval.
Next, after blowing through billions in cash, DOT got a shock: It discovered it had spent too much. It was in a ditch. Watching red ink pile up.
So what did the big spenders at DOT do? They stopped needed projects and laid off hundreds of workers so their legislative allies would give them another $660 million to spend. Immediately.
I know some people hate the term but that’s why it’s called ‘The Raleigh Swamp.’