NC Could be Risking it’s AAA Bond Rating

February 8th, 2012 by NC Tea Party Staff Categories: Archives No Responses

“The annual analysis, approved by the Debt Affordability Advisory Committee, found that the state has exhausted its General Fund debt capacity until fiscal year 2013. Additionally, the combined debt capacity of the Highway Fund and the Highway Trust Fund has been exhausted until fiscal year 2014.

The committee sets a percentage of revenue as the primary metric for determining debt affordability. This percentage for the General Fund is slightly above 4 percent, which is the self-imposed target adopted by the committee. The Highway Fund and Highway Trust Fund’s percentage also slightly exceeds its 6 percent target.

North Carolina’s “triple A” bond rating has been reaffirmed by all three national bond rating agencies. Currently, all of the state’s debt ratios are at or below the median levels for the state’s peer group, composed of other states rated “triple A” by all three agencies. North Carolina’s debt is considered manageable at current levels. The report acknowledges that the state’s current revenue picture is only modestly optimistic and reflects the continued slow pace of economic recovery. Additionally, the study outlines the need for replenishment of the state’s reserves.” — State Treasurer Janet Cowell

Click here for a full copy of the annual debt affordability study (link)(.pdf).

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