Pirate Ship Springs Leak
With Governor Cooper and the liberals in the legislature blocking a budget without massive new spending on a bigger Medicaid entitlement, their irresponsible financial chickens are coming home to roost.
Bond Rating Agency Moody’s just downgraded East Carolina University’s credit: “Moody’s Investors Service has downgraded East Carolina University’s (NC) revenue rating to Aa3 from Aa2. The rating action affects about $369 million of debt. The bonds have an expected final maturity in 2047…”
And despite Moody’s analysis of “very generous financial support” from the state, Moody’s says, “fiscal 2020 financial operations are unlikely to materially improve from the 3.6% operating cash flow margin in fiscal 2019. . .In conjunction with contracting operating margins, university liquidity has moderated in recent years to below 100 monthly days cash on hand, which is modest at the Aa3-rating. Furthermore, the university’s modest operating reserve, with 0.4x spendable cash and investments to operating expenses, is another factor that constrains the rating.”
In fact, ECU’s cash dropped by 7.6% recently, leaving a “weak” outlook according to Moody’s.
Instead of acting as a guardian, Senator Don Davis – who is supposed to represent ECU – voted with Roy Cooper to embark on a multi-billion-dollar spending spree on Medicaid, a program already riddled with fraud.
East Carolina is an institution that prepares students for the jobs of tomorrow. But Don Davis would rather hand out free stuff to adults who won’t work. Senator Davis had a choice: Support East Carolina or support Governor Cooper and his multi-billion-dollar Medicaid spending spree. He chose the Governor and let East Carolina down.