A new state law passed by the legislature and signed by the governor restores fiscal accountability to the process of borrowing money. In a recent Carolina Journal Radio interview, I talked about the law’s impact with Carolina Journal Managing Editor Rick Henderson. You can read the entire Q&A here.

Martinez: So up until now, members of the legislature have been able to decide this on their own. What does the new law do?

Henderson: The bill, which was sponsored by Sen. Tommy Tucker, a Republican from Union County, would basically limit the amount of special indebtedness the state could take on, until it is scaled back to 25 percent of the state’s total indebtedness. Right now, it stands at about 40 percent. We’ve got somewhere in the neighborhood of about $2.5 billion in special indebtedness statewide, and this bill says that the state can’t assume any more until that percentage goes down to 25 percent. And, of course, debt gets retired over time, so you may still see some issues over the next few years, but it may be in a decade or more before you see any more of the special indebtedness issued.

Martinez: Supporters of this change say it protects taxpayers and gives taxpayers more of a voice. How so?

Henderson: Well, for one thing, it prevents the state from going into debt and assuming a form of debt that’s more expensive to repay. … Taxpayers never had a say in this at all. In some cases, these projects might have been approved by taxpayers, had they had the opportunity to look at them. But these were simply done without their authority. And there are people who will argue that the idea of special indebtedness so violates the spirit of the state constitution that they should never have been allowed in the first place.

Martinez: And the last decade or so, we’ve been doing a lot of this in North Carolina.

Henderson: That’s correct. … And as Sen. Tucker said, we survived just fine 200 years without them, so why do we need to have them now? Well, the reason, of course, that they’re perceived to be needed now is because taxpayers are a lot more careful with their dollars, and they certainly are likely to view issues of infrastructure and improvements and things like that with much higher scrutiny than they might have at one time.

Kudos to Sen. Tucker for being the champion on this bill, which will have positive long-term impact on North Carolina.