Debt Report Says North Carolina Government Has Greater Borrowing Capacity



The North Carolina government’s ability to borrow money while remaining financially strong continues to improve despite the economic challenges of the coronavirus, according to an annual report released Tuesday.

The Debt Affordability Study calculates the amount of additional debt the state can incur and stays within self-imposed limits that the study committee says will allow the state to maintain top scores rating agencies. Triple A ratings keep borrowing costs low.

The report projects that the state could approve $ 3.22 billion in bonds this year – or $ 1.46 billion per year for the next five years – and fall short of an overall debt-to-income ratio target. This compares to a debt capacity of $ 2.04 billion in 2020 in last year’s report, or $ 1.1 billion per year over five years.

Increased debt capacity could help Democratic Gov. Roy Cooper and lawmakers on both sides push for a referendum on multibillion dollar bonds for schools, building construction and more infrastructure.

According to the report’s authors, projections for North Carolina’s income growth over the next decade will not be as compromised as initially feared due to the first declines in economic activity during the COVID pandemic. 19. The May 2020 projections had warned of $ 4.2 billion in less revenue than previously calculated until mid-2021. But state economists said last month that the decline will essentially evaporate as tax revenue increases in this fiscal year.

The nine-member study committee is chaired by State Treasurer Dale Folwell, whose office released the report. Other members include State Budget Director Charlie Perusse, State Auditor Beth Wood, State Comptroller Linda Combs and Revenue Secretary Ron Penny. .

The report repeated calculations from the 2020 study that there would be no additional debt capacity for transport projects in the near future. Spending on transportation debt is expected to increase as the state continues to borrow money for road construction, as allowed by a 2018 law allowing up to $ 3 billion in debt.


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