Treasurer Folwell Calls for Public Vote on Any New State Debt Needs Transparency and Cannot Violate Debt Limits

(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA said today the proposed Build NC Bond Act should be put on the ballot for a public vote. The proposed draft, if passed by the North Carolina General Assembly in its current form, would allow the N.C. Department of Transportation to issue special indebtedness bonds of up to $3 billion over ten years for transportation projects. The bonds would be paid using money from the Highway Trust Fund, which is supported by fuel taxes.

“I'm not against more money for transportation nor am I opposed to the goals of those who support the proposed bonds," said Folwell. “I'm against the issuance of any debt that does not meet my guiding principles. I think we need more transparency so that people can decide whether they want to take on more debt in this environment."

Folwell's principles are that any debt must be voter approved, all expenditures of the bond proceeds must be subject to the Strategic Transportation Investment Process and all borrowing must adhere to the state's debt affordability limits.

The proposed additional debt is coming at a time when some are calling for the approval of $1.9 billion in school construction bonds. If the Build NC Bond Act passes along with bonds for school construction the combined state debt would more than double, including $1.8 billion in voter-approved Connect NC bonds that have yet to be issued.

“As the 'keeper of the public purse,' I'm in favor of making government simple and streamlining the process for efficiency's sake," said Folwell. “However, it's important for the people to understand that this additional debt is being issued at a time when we have almost $50 billion in pension and health care liabilities."

The N.C. Department of State Treasurer's State and Local Government Finance Division handles the sale and delivery of all state and local debt and monitors the repayment of state and local government debt. The division also provides fiscal assistance and expertise to local governmental units by assisting them in the sale of local government debt obligations and in maintaining good budgeting, accounting, reporting and other fiscal procedures.