Treasurer: SC can borrow more money, but retirement debt needs to be paid first
COLUMBIA, SC (WIS) - Lawmakers are working on how much money they can borrow for major projects next year- but the state's treasurer is warning them about taking on too much debt.
Any time a bond is discussed, the big question is how much debt will it incur, and that's why the state has voted down some big bond bills in the past.
Now, Treasurer Curtis Loftis says if the state wants to borrow more money, it's got to do something about a bigger debt.
The good news: South Carolina's got a good credit rating, meaning if the state needs to borrow money, like for a $500 million road repair bond, it can and then some.
"That comes out to about a billion dollars, working numbers," Loftis says.
Bond proposals are brought up often in the legislature. They have to be voted on in and passed, usually in connection with the budget. But bonds create debt the state has to pay off, which leads Treasurer Loftis to what he says is the bad news. The state's retirement fund has $21.5 billion in debt it has to pay off, and Loftis says it needs to be paid off before the state borrows any more money.
"The General Assembly, forgive me for saying this, does not understand debt well enough."
Treasure Loftis told lawmakers Monday years of borrowing money to keep the pension fund running drove up state debt, and if the debt isn't wrangled in, Loftis says it could hurt the state's ability to borrow money.
"The system is deteriorating, and that will be taken into future ratings, and we'll have to just work on that," Loftis says.
Lawmakers will have a chance to tackle the debt issue this January when session resumes.
Treasurer Loftis said there were a number of reasons the debt continued to grow, which included the fact that people are simply living longer, drawing more heavily on the retirement fund.
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