NC Bill Would Require Disclosure of Full Costs of Bond Issues

NC Bill Would Require Disclosure of Full Costs of Bond Issues
May 3, 2012

North Carolina has been in the media recently for all the wrong reasons, whether it be the state Democratic Party scandal or the John Edwards trial. It is time for the media and the public to talk about a good reason that attention should be paid to the Tar Heel State: The state is home to one of the most pro-taxpayer pieces of legislation ever crafted.

It is The Taxpayer Information Act (HB 315), the brainchild of North Carolina Speaker Pro Tem Dale Folwell (R-Winston-Salem), who is also a candidate for lieutenant governor.

The bill, if passed, would require that bond measures disclose to voters not only the debt to be authorized but the amount of interest that would be incurred on that debt and that taxpayers ultimately would have to pay.

Currently, bond measures must disclose only how much debt would be authorized. They do not need to disclose the total cost of borrowing, something government requires mortgage lenders and other lenders to disclose. The result is voters approving new public debt without being told the true cost they’ll bear.

Speaker Pro Tem Folwell said in committee his bill is about “Trust, and whether the taxpayers who are asked to approve debt deserve to have the same information that the local government commission has, that the bond counsel has, and that underwriters of bonds have.”

The North Carolina General Assembly returns to session in May. Folwell’s bill is currently pending before the House Finance Committee.

“The Taxpayer Information Act isn’t just good for North Carolina, it’s a model that every state should follow,” said Grover Norquist, president of Americans for Tax Reform.

Patrick Gleason (pgleason@atr.org) is director of state affairs at Americans for Tax Reform.