North Carolina Monday released its 2010 debt affordability report and said that the state has “substantially exhausted” its general fund debt capacity until fiscal 2012.

The triple-A rated state can issue just $9.1 million of additional general obligation bonds that have not already been allocated in each of the next four fiscal years to comply with a 4% debt-service-to-revenue ratio based on revenue and interest rate assumptions, the report said. The state has a $1.9 billion balance of authorized but unissued general fund debt until fiscal 2012.

The report, sent to Gov. Beverly Perdue and leaders of the General Assembly, was written by the nine-member debt affordability advisory committee, which is chaired by state Treasurer Janet Cowell.

The report compares North Carolina’s fiscal health to the other six states that are rated triple-A. The state’s total debt service as a percentage of general fund expenditures is 2% as of Feb. 1 while the median ratio for the seven states is 3.9%.

Tax revenues will gradually increase over the next two years aided by temporary tax increases, the report said. The figures are highly sensitive to tax revenue and interest rate changes, the authors said. If the state can issue its authorized non-GO debt at 5% instead of the assumed 6%, about $44 million of additional debt capacity would be created.

The state has no additional capacity for transportation bonds in fiscal 2011 and 2012. It’s estimated the ratio of transportation debt service to revenue will reach 6.9% in fiscal 2011, “well above its limit” of 6%, the report said.

The report cautioned the state against relying on general-fund supported, non-voter approved special indebtedness, such as certificates of participation and lease revenue bonds. North Carolina is projected to exceed the median level for its peer group if it continues to issue such securities.

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