A state government report says North Carolina has a little more room in which to borrow while remaining within self-imposed debt limits designed to retain the state's cherished top credit ratings that help keep borrowing costs low.

The annual debt affordability study released this week by State Treasurer Dale Folwell's office also urges the legislature to start setting aside funds annually to cover $41 billion in unfunded liabilities, mostly for projected state retiree health care costs.

Report authors project the state could authorize $1.3 billion in bonds this year — or $194 million annually for the next 10 years — without trouble. Those numbers are a little higher than last year's report and are above and beyond $2 billion in debt voters approved in 2016 for building and infrastructure projects.