State and Local Government Debt in North Carolina - Coursework Example

In North Carolina, there are limitations or restrictions on the amount of outstanding debt for the local government in relation to the state’s property tax base. The second major restriction is on property tax rates that the local government can levy for debt service requirements. This restriction is important as it limits the power of the local government to borrow carelessly with an aim of imposing the resultant burden on the citizens.
The third restriction is the need for the approval of the bond issues that the government has proposed and this is done through a specific referendum. This constitution applies only to debts that the local government wants to acquire for a particular purpose. The state government is required to provide a balanced budget that does not have any carryover. This reduces the chances of having huge deficits that prompt the acquisition of loans. If a deficit occurs during a financial year, then it must be eliminated by increasing taxes or reducing spending instead of getting loans. Read More