COPs

Too much debt?

ryanteaguebeckwith — Mon, 30 Jul 2007 12:58:30 -0400

Richard Moore doesn't like the budget's debt.

The state treasurer, who is seeking the Democratic nomination for governor, said in a statement that he does not approve of the nearly $670 million in certificates of participation in the budget, which unlike regular bonds do not have to be approved by voters.

"Our constitution clearly envisioned a vote of the people on major debt projects," he said. "This trend, if unchecked, could have a negative impact on our state's credit ratings."

With the new debt, Moore projected that the ratio of non-voted to voted debt will be 35 percent in 2012, above the median ratio of 26 percent for states given the highest AAA rating.

Moore called for a legislative cap on non-approved debt.

Budget bits

bkrueger — Thu, 19 Jul 2007 19:11:42 -0400

State Sen. Linda Garrou, a chief budget writer and Winston-Salem Democrat, told her colleagues today that they may have a joint House-Senate budget bill to review Monday

But the stumbling block to a deal — a lack of agreement on whether to include a land transfer tax option for counties — has yet to be removed, reports Dan Kane.

House and Senate budget writers have been meeting regularly to resolve differences between their $20 billion spending plans. Both sides say they have much of the budget in place, save for how much to borrow and on what projects.

Senate Majority Leader Tony Rand, a Fayetteville Democrat, said both sides have talked about a target of roughly $500 million in borrowing.

Budget critics

ryanteaguebeckwith — Tue, 19 Jun 2007 12:09:44 -0400

A coalition of labor and anti-poverty groups criticized the state budget discussions today.

Led by the N.C. Justice Center, more than 40 groups argued that the state should not repeal the "temporary taxes" or use certificates of participation for debt.

At the same time, they said the state should create an earned income tax credit and fund the N.C. Kids' Care program.

The coalition includes ACORN, the N.C. AFL-CIO and the N.C. Association of Educators as well as the the N.C. Housing Coalition, N.C. Fair Share and Working Families Win, among others.

Bill Rowe, head of the N.C. Justice Center, described its proposal as a "can-do budget."

Moore on budget

ryanteaguebeckwith — Mon, 11 Jun 2007 13:52:35 -0400

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.

Credit limit?

ryanteaguebeckwith — Tue, 05 Jun 2007 12:14:55 -0400

Gov. Mike Easley and other top officials expressed concern today over a borrowing plan.

The Council of State, made up of the state's 10 highest elected officials, next month is going to consider a resolution that solidifies the reservations it has with using certificates of participation for borrowing instead of voter-approved bonds, Andy Curliss reports.

Easley pointed out that he's wanted the state to issue no more than $25 million without a public vote. "There's too much reliance on COPs," the governor said.

Labor Commissioner Cherie Berry and State Auditor Les Merritt also voiced strong concerns about the possible increased borrowing.

"It's like having a credit card," Merritt said.

More after the jump.

Janet Cowell

ryanteaguebeckwith — Sun, 03 Jun 2007 06:00:00 -0400

Janet Cowell

A former Raleigh City Council member was named environmental senator of the year. In this podcast, Sen. Janet Cowell explains why she favors taking small steps first, what should happen to Dix Hill and why she supports the Senate's proposed budget.

Download MP3

Comments (5)

Podcast RSS feed

Moore: Vote on debt

ryanteaguebeckwith — Fri, 01 Jun 2007 09:00:00 -0400

Treasurer Richard Moore thinks new debt should be voted on.

According to the Greensboro News & Record, he said he does not support the proposed $1.2 billion in certificates of participation in the Senate budget.

He argued that COPs, which do not require voter approval, should be only rarely used, such as when the state has to quickly build a prison, according to an interview posted on Capital Beat.

"There are certain instances where maybe you shouldn't put debt out to be voted. But at the end of the day, if you reread the state's constitution it's clear that the folks who wrote (it) ... expected the people of North Carolina to have a vote when its state takes on debt."

Moore, who is running for the Democratic nomination for governor, also said that COPs are more expensive than voter-approved bonds.

Charge it?

ryanteaguebeckwith — Wed, 30 May 2007 08:09:44 -0400

The Senate budget includes more than $1 billion in debt for construction projects.

But Gov. Mike Easley and state Treasurer Richard Moore, among other Democrats, say that's borrowing too much. They worry it will endanger the state's excellent credit rating.

Since 2000, legislators have approved $2.2 billion in certificates of participation, which do not require voter approval and cost slightly more than regular bonds. The new budget would borrow about half as much over the next four years.

A spokeswoman for the governor said he would not support the plan:

"He believes that we ought to have bonds that allow a vote so the people can decide, and save tens of millions of dollars in interest costs." (N&O)

Summary: House budget

ryanteaguebeckwith — Thu, 10 May 2007 22:56:52 -0400

The House passed a second reading of its two-year budget on a 68-51 party-line vote tonight. Here's a quick summary of the arguments for and against the bill. (Not direct quotes.)

Rep. Bill McGee: I don't like the certificates of participation. We have too much debt. What'll happen in the future? Rep. Deborah Ross: That's not a big deal. We have an excellent credit rating. Rep. Bill Owens: Don't vote against the budget just because you don't like two percent of it. Rep. Paul Stam: Yeah, but that two percent caused us to break our word on the "temporary taxes." Rep. Leo Daughtry: We didn't even get a chance to vote on them. Rep. William Wainwright: That money will be well spent on worthwhile programs. And the budget also provides a tax credit for adoption, an Earned Income Tax Credit and tax cuts for small businesses. Rep. Pricey Harrison: And lots of good conservation stuff too. Rep. John Blust: Come on. We would throw a CEO in jail for signing a financial statement this dishonest. Rep. Annie Mobley: Can't we all just get along?

COPS: Raleigh

ryanteaguebeckwith — Thu, 10 May 2007 07:44:56 -0400

The state House is considering spending $450 million in debt for prisons, universities and other projects.

None of it will be approved by voters.

Although Gov. Mike Easley recommended a bond referendum, the House budget includes debt issued through certificates of participation.

COPs, as they are usually called, are more expensive than voter-backed bonds. In addition, the House would spend $65 million more than recommended by state Treasurer Richard Moore, and more than double what Easley proposed.

Spending that much without voter approval has some legislators nervous, according to Dan Kane in this story:

"We're committing the voters' money for eight years from now, 10 years from now, so the voters ought to have a say as to whether they want to pay for that much debt," said Senate Minority Leader Phil Berger, a Rockingham County Republican.