Debt is part and parcel of most people’s lives — cars, homes, education and more are acquired, by most, only by incurring a certain amount of financial indebtedness.
Governments, of course, are no different. One of the major news stories coming out of Washington, D.C., in recent weeks is the U.S. House’s vote to lift the debt limit for two years and increase federal spending to $1.37 trillion in fiscal year 2020.
It’s caught the eye of Chatham’s congressman, U.S. Rep. Mark Walker (R-N.C.), who has spoken several times about how the legislation is bad conservative policy.
“With $22 trillion in debt and the deficits that have been out of control, we have got to find some things,” he said July 22 on CNN, “specifically maybe even in the mandatory side to make sure we are curbing that and not leaving our children and grandchildren a debt that they cannot repay.”
In light of this, the News + Record decided to look at how much Chatham’s governments are in debt — and how they’re working to pay it off.
Chatham County
According to Chatham County Finance Director and Assistant County Manager Vicki McConnell, addressing the county’s debt is one of the first priorities in the yearly budget process.
“We’ve got to make sure we pay the debt,” she said. “That’s just a given.”
The county had $115,096,144 in debt at the end of fiscal year 2018, with major projects incurring debt including Chatham Grove Elementary School and Seaforth High School, both under construction. The fiscal year 2019-2020 budget increased its General Fund spending on debt payments by 36 percent from the previous year, up to $15,037,661. Initial payments for the new schools and the new Central Carolina Community College Health Sciences building at Briar Chapel are due this year.
The total debt payment in this budget — $16,669,187, if you include utility debt — makes up 8.5 percent of the county’s total expenditures. The county has several pots of money designed to help pay off debt, including impact fees. These fees, collected when issuing building permits for the construction of new dwellings, accounted for $3,109,900 in fiscal year 2019 and all went to school capital payments.
Town of Pittsboro
According to financial reports, the Town of Pittsboro has a debt of $3,998,758, most of it derived from vehicles purchases for law enforcement and the utility department.
The town is slated to spend $421,061 on debt payments this upcoming fiscal year, accountable for 4.9 percent of the annual budget. It’s a decrease from previous years. That payment will help retire some of the loans — the town is slated to pay off utility trucks, a backhoe and a backwash pump this fiscal year for $13,947, as well as $76,754 for police vehicles and equipment.
The most recent town audit available, for fiscal year 2018, stated the town’s debt decreased by $302,482 from the previous year because of regular loan payments and the retirement of a loan from the Water and Sewer Fund.
Town of Siler City
The Town of Siler City currently has $10,344,411 in debt and is planning to issue approximately $107,000 more this upcoming year. Those purchases include three vehicles for the Police Department, a truck and compact tractor in public works, two vehicles and a field machine for the city’s Parks and Recreation Department and a boom truck for Sanitation. The town’s total debt decreased by $868,052 during the 2018 fiscal year, with the majority coming from making two loan payments on the expansion of the town’s reservoir.
The fiscal year 2019-2020 budget has $1,544,746 allocated for debt payments in the General Fund and Water & Sewer. That will account for 6.5 percent of the town’s total spending plan.
State of North Carolina
The State of North Carolina, according to the N.C. Treasurer, has $6.475 billion in total debt, with $4.96 billion of it supported by state property tax payments. The report stated that 49 percent of that debt relates to higher education, like the University of North Carolina school system, with 16 percent for transportation, 5 percent for hospitals and 1 percent for public schools.
The rest of the debt is called “self-supporting,” which means the state does not use property taxes but other revenue sources, such as highway tolls and energy savings.
The state’s 2017-2019 budget set aside more than $1.49 billion for general debt service, which counts for 3.2 percent of the state’s budget.
United States of America
As previously mentioned, a lot of attention has been directed to the federal debt. The national debt hit $22 trillion earlier this year. According to the Pew Research Forum, the federal government will have paid $393.5 billion on interest — not the debt as a whole — in fiscal year 2019, which ends September 30.
The interest payment accounts for 8.7 percent of all federal expenditures. The Pew article stated that debt service was more than 15 percent of federal spending in the mid-1990s.
Reporter Zachary Horner can be reached at zhorner@chathamnr.com or on Twitter at @ZachHornerCNR.