North Carolina’s true state debt burden stands at roughly $9.4 billion, about $4,000 for every NC family of four. Per capita state debt has more than doubled in eight years. The state also has an unfunded liability for state retiree health benefits of nearly $30 billion. The state’s debt capacity is full, and threatens the state’s credit rating. State revenues for the current year are below projections, prompting the Governor to hold back 5% of funds from state agencies.
And adding to the state’s fiscal woes is a loan the state owes to the federal government for unemployment benefits. A loan that -surprise! – will soon require interest payments.
Right now, states are getting an interest-free loan from the federal government to pay unemployment benefits, but that could soon change.
About one in 10 people in the state are without a job. That’s meant high unemployment benefit payouts for the state – $2.5 billion in 2009.
By the end of this year, it’s expected the state will owe the feds up to $3.5 billion. That money is interest-free until the end of the year, when a 4.36 percent interest rate would kick in. That interest would add up to $153 million extra the state has to pay back.
“The interest will be paid by the general fund, and it’s an additional consideration for the state,” said State Treasurer Janet Cowell.
Cowell warned lawmakers Tuesday they should start planning to have to cover that interest payment. That came as a surprise to some legislators.
And what plans do our elected leaders in Raleigh, those titans of fiscal responsibility and wise stewards of our tax dollars, have to handle this loan? Hope it just goes away!
“There are rumors coming out of Washington that we would probably be in a position to be forgiven either some part of the debt, or that the extension of the no interest situation would exist,” Rep. Mickey Michaux, D-Durham County, said.
This fiscal disaster was a long time in the making.
And this is the bunch that wants to lecture its citizens about “financial literacy”?