Debt study indicates North Carolina government still in good fiscal position


RALEIGH, North Carolina (AP) — The North Carolina state government continues to hold a comfortable cushion of additional borrowing capacity it could use while remaining financially sound, according to an annual report released this week.

The authors of the Debt Affordability Study estimate the state could approve $4.35 billion in bonds this year — or $1.42 billion a year for the next five years — and stay within self-imposed limits.

The cap is designed to help the state maintain top scores from credit rating agencies that keep borrowing costs low. The 2021 study calculated a similar projection on loans repaid using tax revenue from the state’s general fund.


Outstanding debt on non-transit projects is currently expected to fall to less than $1.9 billion in 2026, according to the report. Talk of a bond package for school construction in 2021 has eased as state coffers fill with a state surplus and federal COVID-19 recovery dollars. Instead, the legislature funded dozens of projects with money.

The study, endorsed by a panel led by State Treasurer Dale Folwell, again warned that there is no additional debt capacity for transportation projects for the foreseeable future. He cites pre-borrowing associated with a 2018 law that allowed up to $3 billion in debt. This debt is largely paid off by gasoline taxes and car sales.

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