After years of prudent spending and tax cuts that spurred the economy, when Governor Cooper took office, the Department of Transportation was rolling in cash to build highways.
Governor Cooper’s appointees decided to spend it all – which is the single activity Democrats excel at.
After a few months, with the coffers emptying, DOT decided it would borrow another $300 million using the Build NC Bonds.
Now, to issue a bond you must tell people about any pending financial liabilities you have that may get in the way of your repaying the bonds. And for DOT that’s where things got sticky. Because back in 2016 the State Supreme Court had issued a unanimous decision against DOT in the ‘Map Act’ lawsuit, saying DOT had taken private property without compensating people and it had to pay everyone back for their losses.
When DOT issued those bonds, it admitted it had already paid $220 million to settle those claims – which was true – but then added any future claims were not ‘material’. In other words, they told the bond buyers that future Map Act settlements would be too minor to impact DOT’s ability to repay the $300 million.
DOT borrowed and spent the $300 million then got a shock: It suddenly found it was strapped for cash with red ink piling up.
Seeking a bailout, DOT bureaucrats rushed over to the legislature but this time they told a different story: They said they needed $360 million dollars because they’d been ambushed by ‘unexpected’ Map Act payments.
Imagine if you went down to your bank and borrowed $100 thousand to buy a house but hid the fact that you owed another $100 thousand to settle a lawsuit. You’d have some explaining to do.
So how does DOT get away with saying in June that Map Act payments were not material to repaying a $300 million-dollar bond, but then, four months later, telling the legislature it urgently needs $360 million due to Map Act payments?
At this rate, The Swamp may drain itself.