North Carolina’s 2015 Debt Affordability Study shows the state is ready to begin issuing debt again and making big investments.
State Treasurer Janet Cowell says the Debt Affordability Study shows the General Fund has the capacity to take on $700 million a year and Transportation debt capacity is $1 billion.
“I mean, at some point to, after six years of not investing in the state you’ve got bridges that inevitably are going to have to be fixed. You’ve got sewer systems that need to be repaired. You can do it now or you can do it later," said Cowell. "It’s probably cheaper to do it now.”
The last General Obligation Bond approved by North Carolina voters was in 2000, mostly for universities.
Cowell says it may be hard for some lawmakers to believe the General Fund has the capacity to take on so much debt a year, after such a long economic downturn.
“We’ve been just in a period where people did not want to take out debt, did not want to invest. And that’s despite the fact that we do have some historically low interest rates right now. So it is a good time to undertake projects and invest," said Cowell.
North Carolina is one of approximately ten states that has been issued AAA bond ratings by all three rating agencies - Moody's, S&P and Fitch. The Dept Affordability Study quotes Moody's saying, "Despite the sizable increase in debt over the last several years, the state's debt burden is below average when compared with other states."