State News

Debt study finds little room for state to borrow

Posted February 2, 2010

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— A new report says North Carolina has essentially exhausted its ability to borrow money for state buildings and roads if it wants to protect its top credit rating.

The annual Debt Affordability Study, released Tuesday by State Treasurer Janet Cowell, says the state can borrow only an additional $9 million backed by tax revenues for each of the next five years and remain within self-imposed guidelines.

Officials base the recommendation on the assumption that annual debt service should be no more than 4 percent of state revenues.

"The use of federal stimulus funds was key in balancing the state’s budget, however, permanent solutions will need to be put into place as quickly as possible to secure long-term stability and replenish reserves in order to maintain the bond rating,” Cowell said in a statement.

The report also found there's no extra debt capacity for transportation projects until at least 2013.

Lawmakers review the commendations in deciding whether to authorize new borrowing.

Cowell also called on lawmakers to centralize debt authority to limit the ability of various agencies to "enter into alternative financial arrangements that may include debt and debt-like obligations."

A lawyer for the Treasurer's Office recently expressed concern over the public-private financing plan for a portion of Interstate 485 around Charlotte.


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  • dadgumit Feb 2, 2010

    It was less than a month ago the STATE collected $247 MILLION in back Taxes What happen to all this MONEY ????????????????????????????/

  • donnied1952 Feb 2, 2010

    Hey Bev, it's called pay as you go.

    If we as the public, and I do have a good credit rating, can't readily borrow money, then why the heck do you think this state can or shoud for that matter.

    Get off you duff and get back from your private vacation (none of the rest of us could afford that) and do your job.

    Get the legislators on board with you on a pay as you go.
    To simplify that for you, it's when if you don't have the money, then you can't have it.

    The rest of the NC citizens know what I am talking about. We've been living like that for a long time now. How about you catching up with us Bev.

  • gordonbabe Feb 2, 2010

    This is a joke. No harm no foul. They'll just keep borrowing the money like always and when the State winds up broke they'll just take it from the State employees like they did last year.

  • pbjbeach Feb 2, 2010

    NOW Maybe state government an all of the pols republican & dems will learn to live within their state tax revenues budgetfor in my own personal opinion their sure as he-- idn't any room left to be adding any new taxes fees or whatever you want to call them on to the backs of the taxpaying citizens of this stae thank you

  • 1carpe Feb 2, 2010

    These problems didn't just start. They have been going on for years and years and have finally caught up in the last couple of years in this state. You have to keep something in mind...a large number of people who don't pay and have never paid taxes are the ones who keep electing the type of legislators who just keep giving out so called "entitlements." No, before you Libs out there get your dander up, I did not say "all", but instead, a good number. You take away 10-15% of any vote which elects a liberal (the entitlement crowd) and in a lot of precincts the Lib does not get elected. And yes for six years Bush and a Republican majority(don't forget the last two years it was Bush and the Dems with the majority) were fically irresponsible...but nothing like what we are seeing now. Also remember, the Democratic Party has ruled this state for 170 years. The more liberal wind of that party has ruled this state for the past 20.

  • smarterthanyou2 Feb 2, 2010

    "This means entire departments that in good times are a nice to have but are not essential to the running of the State must be elimnated. Departments top-heavy with administrative fat, must be pared to the bone."

    The thing that infuriates me is they try to instill into consumers the idea that you need 6-12 months of "emergency" funds for a rainy day and yet no level of government does this. They spend and spend and spend without ever contemplating saving first.

  • mewuvbb Feb 2, 2010

    This means people your State Tax Refunds will be delayed again this year. Anyone want to make a bet. All proceeds go to the Benefits to the pockets of our NC respresentitives.

  • bngexpress Feb 2, 2010

    good now the state should be made to operate as much if us have to ,within their means,cut some of the high paid positions that were made to keep a friend in a job.

  • Bendal1 Feb 2, 2010

    The state's already cut back; note that DOT was short 1000 employees who normally worked on snow removal this weekend. I thought Purdue's use of Federal stimulus money to shore up this year's budget was wrong and I still think so, because it basically robbed Peter to pay Paul. In another year, if the economy hasn't picked up by then, we'll be looking at an even larger hole to try and fill somehow.

  • Caveman93 Feb 2, 2010

    Bev will just borrow more from the Fed's. They'll keep printing it...I'm pretty confident in that.