If a state borrowing law is upheld by the N.C. Supreme Court, local governments will no longer seek public approval for any large loans, a taxpayers' attorney told justices Wednesday.
The law, which commits local governments to borrow money without a vote of the people, was expanded last year by the legislature. In the case in question, Wayne County commissioners used the law to borrow $7.5 million for renovations of and additions to the county courthouse.Wayne County Citizens for Better Tax Control contends the law is unconstitutional, contending the state constitution requires a public vote before local governments can pledge their taxing authority toward the repayment of debt.
The law gives local governments too much power, taxpayers attorney Roland Braswell argued. Should it be declared constitutional, ``then God help the state of North Carolina,' he said.
Braswell said commissioners have an obligation to pay the debt.
``If there is no taxing power pledged then a vote is not required, isn't that what the constitution says?' Justice Harry Martin asked Braswell.
``It's a play on words, your Honor,' Braswell said.
But the commissioners disagree. The constitution clearly requires a public vote only when the local government can be forced to raise taxes, Wayne County attorney Borden Parker told the seven Supreme Court justices.
The law was amended to help local governments cope with pressing facility needs, Parker said.
The commissioners say the measure doesn't have to be put to a vote of the people because the lender cannot force the county to raise taxes to pay the debt. The lender's only recourse, should the county default, would be to foreclose on the courthouse.
``Commissioners thought it was the best thing to do,' Parker said.
The case is expected to set state precedent. More than 20 local governments have used the law to borrow nearly $100 million since last year.
Should the law be declared unconstitutional, their projects could be jeopardized.
The taxpayers association sued the county earlier this year.
A Superior Court judge ruled in April that the law is constitutional and that commissioners properly applied it.
The Supreme Court agreed to hear the case on appeal, bypassing the state Court of Appeals.
Parker said county officials hope a decision is reached by January or February so work may proceed as scheduled.