BRADENTON, Fla. — Tennessee reduced its long-term general obligation debt by more than $175 million in the last year and a half, according to state comptroller Justin Wilson.
The triple-A rated state had $1.8 billion in outstanding GO bonds and $3.82 billion in other major state debt outstanding at the end of fiscal 2014, Wilson reported to the governor and legislators in December.
The GO bonds were sold primarily to fund capital projects, provide grants to local development boards, and support economic development. The state has another $324.36 million in outstanding GO commercial paper.
The report, which assists officials in monitoring the state's finances on a semi-annual basis, said that Tennessee has one of the lowest overall debt burdens in the country, and is currently projected to repay more than 66% of its outstanding GOs within 10 years.
"Tennesseans should applaud the conservative financial principles of our General Assembly and Gov. [Bill] Haslam," Wilson said. "Simply stated, Tennessee doesn't borrow much money and pays back what it owes quickly."
In addition to GO debt, the comptroller's report covers issuance by three other state agencies, whose bonds are rated in the double-A category. The Local Development Authority had $5.52 million in bonds outstanding.
The State School Bond Authority had $1.26 billion outstanding in addition to $157.58 million in a revolving credit facility; $43.92 million in qualified zone academy bonds; and $389.44 million in qualified school construction bonds outstanding. The Housing Development Agency had $1.96 billion in outstanding bonds.
The debt report said the state's bond issuing agencies have a total of $3.85 billion in authorized but unissued bonds as of June 30.
During last year's legislative session, lawmakers enacted several new laws pertaining to financing. Those included a prohibition against spending state funds for the indebtedness of municipalities. Another law requires the comptroller's approval before any local government issues balloon or heavily back-loaded debt.
A third law requires municipalities that do not participate in the state pension system to pay 100% of the annual actuarially required contribution for their defined benefit pension plans.
The Legislature's regular session begins this month, and political observers are predicting that Medicaid expansion and education will be the top issues.
On Jan. 8, Haslam announced that he would call a special session of the General Assembly on Feb. 2 to consider "Insure Tennessee," a resolution calling for a two-year pilot program to provide health care coverage to Tennesseans who do not currently have access to health insurance or have limited options.
