RALEIGH, N.C. — (AP) — North Carolina state government continues to hold a comfortable cushion of additional borrowing capacity that it could use and still remain fiscally sound, according to an annual report released this week.
The Debt Affordability Study authors estimate the state could approve $4.35 billion in bonds this year — or $1.42 billion annually for the next five years — and remain within self-imposed limits.
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The cap is designed to help the state retain top credit-rating agency scores that keep borrowing costs low. The 2021 study calculated a similar projection on borrowing that’s repaid using state general-fund tax collections.
Outstanding debt on non-transportation projects is currently projected to fall to less than $1.9 billion in 2026, the report said.
Discussions about a school construction bond package in 2021 eased as state coffers became flush with a state surplus and federal COVID-19 recovery dollars. The legislature instead funded scores of projects with cash.
The study, approved by a panel led by State Treasurer Dale Folwell, again warned there’s no additional debt capacity for transportation projects for the foreseeable future. It cites anticipated borrowing associated with a 2018 law that authorized up to $3 billion in debt. Such debt is repaid largely from gasoline and car-sales taxes.
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