California Bond Debt
John Seiler, over at California Watchdog, recently took a look at how much money the state could save by suspending all the voter approved spending initiatives. I suggested he should also consider looking at how much we could save by recalling voter approved bond initiatives. He did, and here's his report.
His findings were not what I expected. I'd expected to see possibly tens of billions of dollars in savings if we could pull unsold bonds- the High Speed Rail bonds being a big one- off the market. What I hadn't considered was that the bonds are paid off over periods of 20 to 30 years, so it doesn't appear pulling the bonds would have as much impact as I'd thought.
Yet we're still talking about spending over 47 billion dollars in bonds not yet sold and with bonds certain to be approved by Californians in the future, you can bet we'll be looking at tens of billions of dollars more in debt.
Seiler points out in his report that, just on current bonds the payments will rise from over $11 billion in 2014 to over $19 billion in 2027-28. The percentage debt payment will take from California's general fund will rise from 6.71% in 2009 to to over 9% in 2027-28.
That actually doesn't look so bad, when compared to the hundreds of billions of dollars the state is on the hook for in unfunded public pension debt.
Labels: California State Government