N.C. has enough debt capacity to absorb $2B bond proposal, treasurer says Jan 28, 2016, 7:25am EST The North Carolina general fund has enough capacity to absorb $210 million in new debts per year for the next 10 years, according to a study released by N.C. Treasurer Janet Cowell.
Every year, the Debt Affordability Advisory Committee provides a look at North Carolinas debt capacity, but the report carries extra weight this year as North Carolinians will vote on a bond package in March that could see the state borrow $2 billion for a wide range of infrastructure projects.
In short, the report supports the notion that the state could borrow the full $2 billion without the need to raise taxes, something bond supporters, including Gov. Pat McCrory, have also said. North Carolina enjoys a triple-A rating from all three major rating agencies, one of only nine states that can boast that claim. The states debt ratios are below the median of those nine states, and the advisory committee estimates that additional borrowing from the bond proposal would not cause a ratings downgrade.
This report is of elevated importance this year as voters consider approval of the Connect NC Bonds, Cowell said in a statement. Our findings demonstrate that North Carolina has maintained a conservative posture on debt and has the ability to responsibly invest in its future and keep the AAA bond ratings if the Connect NC bonds are approved. In addition to the general fund report, the advisory committee report shows the combined debt capacity of the Highway Fund and the Highway Trust Fund is about $1.1 billion for the current fiscal year.