RALEIGH – It was described as ‘investing in our future,’ which usually means spending other’s people money now to be provided by taxpayers later. The silver lining is this ‘investment’ is coming with a low interest rat.
Republican State Treasurer Dale Folwell, through the State and Local Government Finance Division, announced Thursday the issuance of approximately $400 million of voter-approved General Obligation Public Improvement (Connect NC) Bonds.
This is the second round of bonds for the $2 billion Connect NC debt offering approved in 2016 for universities, community colleges, local parks, infrastructure improvement and other projects. The first was a $200 million bond sale.
For this tranche, the total amount of interest to be paid over the life of the loan is approximately $163 million, according to Folwell.
The whole package of bonds were purchased by Bank of America Merrill Lynch at an interest rate of 2.865 percent – a rate only possible because of North Carolina’s ‘AAA’ bond rating as a result of the General Assembly’s conservative fiscal approach.
Just recently all three major national bond rating agencies re-affirmed the state’s ‘AAA’ bond rating, noting the state’s strong economy, growing reserves and conservative fiscal management. North Carolina is one of only 13 states that have an “AAA” rating from all major rating agencies.
“Continuing to have all three agencies affirm our ‘AAA’ rating is essential,” said Treasurer Folwell. “This allows us to get very favorable rates, saving taxpayers millions of dollars. The credit goes to taxpayers who pay for these bonds and the General Assembly for their conservative fiscal management of the state’s finances. I’d also like to thank the staff at the State and Local Government Finance Division for their hard work on the sale.”
It is the taxpayers, after all, that finance everything state government does. If we are going to take on debt, something conservatives were not too thrilled about when the Connect NC bond was first being sold to voters, at least Republican control has put the state on sound enough financial footing so as to earn the best credit rating and keep interest payments low.