North Carolina wants to use existing low rates to shore up retiree pensions and health-care debt.
In the low interest rate environment, states and localities have been saving billions by refinancing old debt. In most cases, the savings have benefited the general fund balance. But in North Carolina, State Treasurer Dale Folwell is making a push to instead use those savings to pay down pension and retiree health-care debt.
Starting this spring, Folwell plans to refinance “every dollar we possibly can.” He’ll ask the General Assembly to divert the savings to the treasurer’s office, where he’ll then divvy up the extra dollars: 15 percent goes into the pension fund and 85 percent goes toward retiree health-care debt, which has a larger unfunded liability.