State Treasurer Dale Folwell’s call for Gov. Roy Cooper’s budget and finance unit to take over responsibility for N.C. Department of Transportation finances — and dismiss agency Secretary James Trogdon — has sparked rising hostility between the two state officials.
Folwell’s main beef is that N.C. DOT is overspending and making more than $1 billion in short-term loans between the Highway Trust Fund and the state Highway Fund without proper approval from the treasurer’s office, which is responsible for the state’s debt issuance and credit rating. N.C. DOT officials say they’ve done nothing wrong and followed the letter of the law in responding to a cash crunch caused by a series of natural disasters and legal settlements related to a now-repealed law that enabled the agency to block development in various highway corridors.
Greensboro lawyer Mike Fox, who chairs the N.C. DOT board, says he has “complete confidence in Secretary Trogdon and the leadership team at NCDOT and sincerely hope that the Treasurer will focus more in the future on working with NCDOT to solve the problems caused by natural disasters and the Map Act Litigation.“
Cooper’s team offered a more biting reaction to Folwell with spokeswoman Megan Thorpe issuing a statement: “A financial lecture from the nation’s least effective state treasurer, who boasts among the worst fiduciary returns on investment and raised the cost of health care for state employees during his tenure, is not credible.”
Requests for comment to detail those criticisms weren’t returned by Cooper’s media office. Since his election in 2016, Folwell has emphasized his efforts to reduce management costs related to the state’s $100 billion pension funds, simplify the state’s investment strategies and reduce N.C. health care spending.
The N.C. DOT dispute centers around spending of Build NC bonds approved by lawmakers last year to accelerate some highway projects because of the state’s rapid growth. The state has the authority to issue up to $300 million in Build NC bonds annually for the next decade. But N.C. DOT has not been specific on use of the funds, so bond rating agencies have raised concerns with the treasurer’s office, Folwell said today in a conference call with reporters.
In September, N.C. business leaders urged state lawmakers to provide more money to help N.C. DOT get through its current financial straits, but no action was taken in the session that concluded last week, Folwell says.
“It’s beyond me why the governor wants to attack me and not attack problems,” Folwell says. “My suggestion is to bring financial management of DOT more directly under him and not take away any power.”
Folwell said he is relying on advice on the N.C. DOT finances from treasurer’s office employees who worked for previous agency leaders, including Janet Cowell and Richard Moore, both of whom are Democrats like Gov. Cooper. Folwell is a Republican.