New State Treasurer Janet Cowell's office has posted their Debt Affordability Study for 2009. The outlook is not pretty.
This press release summarizes the main findings and recommendations of the study. Some highlights:
However, the combined debt capacity of the Highway Fund and the Highway Trust Fund has been exhausted through Fiscal Year 2011-2012 and recovers only modestly thereafter over the 10-year model horizon.
The $50.2 million recommended limit on annual authorizations is down dramatically from last year's figure of $480 million. And note how there is no capacity left for any more transportation bonds for the next three years (of course, the federal stimulus package may provide additional funding for "infrastructure").
Since 2000, the state has authorized $6.2 billion in new debt, half of which was not voted on by taxpayers. This debt-financed spending spree doubled state debt in just seven years.
This provides yet another lesson of the short-sighted nature of state lawmakers. They go on a spending binge when revenues are flowing, and are left scratching their heads when they find themselves faced with yet another budget deficit – and their credit line cut off.