(The Center Square) – Taxpayers have been saved $11 million in North Carolina, the 2024 Debt Affordability Study shows.
The big gain came through maneuvers involving Silicon Valley Bank. The bank failed, and state Treasurer Dale Folwell along with the State and Local Government Finance Division purchased $20 million in Connect NC bonds the bank held at a discounted rate to par (71.875%). The purchase price including closing costs was just over $14 million, a release said.
Lawmakers in the General Assembly, which has three-fifths majorities in both chambers, were also credited. The Legislature allocated funds to pay off callable state bonds, or to purchase and cancel state bonds from the secondary market “that have debt service paid from the State Capital and Infrastructure Fund,” a release said.
Folwell, in the release, said the opportunity was great and particularly at a time coming through inflation at a 40-year high.
“We are in the sixth year of retiring over 60% of the state’s debt over an eight-year period,” said the second-term Republican and certified public accountant. “I don’t know of another state or country that can say that. And that’s why ‘NC’ stands for ‘nothing compares.’ It’s a tribute to taxpayers, employers and the General Assembly that we have budget surpluses and reserves. But we still have approximately $43 billion in unfunded pension and health care liabilities. That bill will come due much sooner than people realize.”
Folwell, former member of the state House of Representatives and a candidate for governor, is the first elected Republican in the office since David Jenkins exited in 1876.
The study is adopted by the Debt Affordability Advisory Committee. The ability to issue debt for capital needs is its primary purpose, and control of the state’s debt burden is a key factor in rating agencies.