HB 491 was filed yesterday, and it is a popular measure long overdue. The bill, titled “NC Certificates of Participation Referendum” would amend the state constitution to ensure voter approval over new state debt being issued in the form of Certificates of Participation (COPs).
The state constitution already requires voter approval over state debt “secured by a pledge of the faith and credit of the State.” COPs, however, are technically secured by the value of the capital project being financed (usually buildings or prisons) and therefore are not subject to voter approval.
State lawmakers have relied almost exclusively on COPs debt for the past decade. Indeed, the last time voters were allowed to vote on new state debt was 2000. Since then, North Carolina’s per capita state debt has more than doubled, and annual payments to service state debt have more than tripled.
I’ve written previously about why such an amendment is needed in North Carolina – it only seems sensible and fair that the very people being forced to pay back the debt (taxpayers) be allowed to have a say in approving an increase in that debt.
Past polling by Civitas indicates widespread support for ending unauthorized issuance of state debt, with an overwhelming 77% of likely voters responding that the North Carolina General Assembly should not be allowed to borrow money without voter approval.