Treasurer Richard Moore wants the state to stick to its credit limit.
In a letter sent today to state legislators, Moore urged the General Assembly not to issue more than $2 billion in debt over the next five years, or $384 million next year:
There are great needs across our state – from school construction and water and sewer improvements to land conservation and transportation – but we must maintain our commitment to keeping our fiscal house in order.
A candidate for the Democratic nomination for governor, Moore also asked legislators to repay $45 million it borrowed in 2001 from the state pension fund, which he oversees.
As noted previously, Moore also opposed using certificates of participation, which do not require voter approval and which carry a slightly higher interest rate.
Correction: An earlier version of the post misstated who it was addressed to.
Full text of the letter after the jump.
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Dear Senator Swindell:
As you and your colleagues negotiate the final budget, I encourage you to carefully consider the type and amount of debt that you approve. This year’s Debt Affordability Study clearly established the level of debt that our state can support – $384 million each year over the next ten years or approximately $2 billion over the next five years. While there are a number of important needs faced by our state, I strongly urge you to adhere to these reasonable limits.
I also encourage you to limit the amount of special indebtedness, or Certificates of Participation (COPs), that the state takes on. For state needs, COPs should only be used in very special situations where needs are immediate. The increasing reliance on COPs in recent years is a departure from our history of responsible management. Instead, we should return to the use of General Obligation (GO) debt, which costs taxpayers less. The citizens of North Carolina deserve a vote on the kind of important statewide projects that you are considering, and that is precisely how the framers of our Constitution intended debt to be issued.
Managing our state’s debt wisely is critical to maintaining our state’s fiscal health and preserving our “triple A” credit ratings. There are great needs across our state – from school construction and water and sewer improvements to land conservation and transportation – but we must maintain our commitment to keeping our fiscal house in order. We have worked together to put the state’s finances back on track and to restore our superior credit ratings, and I hope we can work together to avoid a repeat of the fiscal nightmare we experienced in 2001.
Finally, I remind you that this body has pledged to repay all the funds diverted from the pension fund in 2001 by July 1, 2008. I have attached the budget document from 2001 as a reminder of this commitment to the system and our retirees. The final installment of this repayment – $45 million – must be included in this budget.
Thank you for your attention to these important issues facing our state.
Sincerely,
Richard H. Moore
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