Annual study warns against authorizing new NC debt
A panel led by State Treasurer Janet Cowell says North Carolina government has no extra room to authorize new debt if it wants to keep its top credit rating because of a poor revenue situation.Posted — Updated
Cowell's office released on Tuesday the annual Debt Affordability Study. The committee said the state has exhausted its ability to borrow money through mid-2012 on things like building construction and through mid-2013 for transportation projects.
Last year's study only suggested a little extra debt capacity was available.
The report said officials took into account a pair of temporary taxes set to expire this year and the end of federal stimulus money.
“Without a broadening of the tax base and more stable revenue stream, we will find ourselves in a situation that offers even less budgetary flexibility and creates the need for continued tough decisions to be made by our lawmakers,” Cowell said in a statement.
The limit doesn't prevent $1.6 billion in borrowing already approved but with debt yet to be issued.
The study also identified three liabilities that state lawmakers need to address: the unfunded portion of retiree health care benefits, which totaled $32.8 billion at the end of last year; the $2.15 billion to the U.S. Treasury for funds borrowed to make unemployment benefit payments; and the failure to fund the annual required contribution rate to the state Retirement Systems that will result in an increase to the state’s net pension obligation.
Copyright 2023 by WRAL.com and the Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.