Posted: Mar 2, 2012 5:34 AM by AP
Updated: Feb 22, 2013 4:03 AM
BATON ROUGE, La. (AP) - The amount of debt Louisiana carries for each state resident rose again over the last year, the third year of increases, but the state remains well below its debt cap, according to a report released Thursday.
The latest assessment, presented to the Bond Commission, showed Louisiana carried a debt load of $1,318 for every man, woman and child in the state, an increase of $11 per person from the previous year.
The total "net state tax supported debt" showed outstanding state debts of $6 billion as the books were closed on 2011.
The per capita debt has grown under nearly every year of Gov. Bobby Jindal's administration, though it hasn't reached the record set in 2007.
Treasurer John Kennedy said the state has a healthy debt load that puts it squarely in the middle of states by comparison.
"We're in pretty good shape," said Kennedy, chairman of the Bond Commission. "I think we've done a good job of managing our debts. We're in a lot better shape than a lot of other states."
The assessment was more optimistic than in recent years, when Kennedy and commission members worried the state's budget woes could edge Louisiana ever closer to the constitutional limit on debt.
Louisiana's state income is rising, and the state is on track to stay below the cap, even with expected future borrowing for state-backed construction projects, according to the report. That means the state doesn't have to shrink its planned borrowing or curtail building plans.
The state must maintain a balanced budget for its operational expenses each year, but it can borrow money to pay for construction projects, like roads and building repairs, through bond sales. The state issues bonds to investors and pays the debt with interest over several years.
A limit enacted in the early 1990s requires that the state's annual repayment requirements fall under 6 percent of the state's yearly income from taxes, licenses and fees. The state has never exceeded the limit.
"We're pretty comfortably within the debt limit. Now that doesn't mean emergencies don't happen, but we've got plenty of room here," Kennedy said.
The per capita debt has been higher only once since the commission started yearly tracking in 1988 - when it reached $1,369 per person in 2007 under former Gov. Kathleen Blanco's administration, pushed up by post-hurricane rebuilding, road construction and other projects.
The debt report came the same day the Bond Commission held an online auction to sell $400 million in general obligation bonds, borrowing that will pay for ongoing and planned state construction projects and that will be included in next year's debt report. The commission also agreed to refinance $49 million in existing state debt for a lower interest rate that will save Louisiana more than $5 million over the repayment of the borrowing.