Today, Treasurer Magaziner released the following statement regarding the State of Rhode Island's borrowing capacity:
"As the General Assembly prepares to pass a FY 2021 budget, this is a good time to remind all stakeholders of the most recent analysis of state borrowing capacity conducted by the Office of the General Treasurer.
Bonding, and other forms of long-term borrowing, can be a useful tool in times of crisis for stimulating economic growth, creating jobs, and improving our state's quality of life. At the same time, it is important that the State not borrow above its means.
Using the guidelines of the Public Finance Management Board (PFMB), our office believes that $587 million of total borrowing is reasonable and affordable at the current time. This figure includes all forms of new long-term borrowing including general obligation bonds and certificates of participation.
This level of borrowing would bring the State to approximately the limit of the PFMB guidelines in the current fiscal year, while also leaving capacity for up to an additional $417 million to be considered by voters on the 2022 ballot as old debt is retired, and roughly $2 billion of total capacity over the next decade.
As the General Assembly considers the Governor's proposed budget, we encourage prioritizing bonding for projects that will be most impactful in improving public health, catalyzing economic recovery, and supporting Rhode Islanders facing hardship due to the Covid-19 epidemic."
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Treasurer Magaziner's July 3, 2020 "Bonding in FY21" memorandum can be downloaded at the link below.
Contact: Rosie Hilmer, Director of Communications (401) 222-2240 | (401) 439-2199 (mobile) rosie.hilmer@treasury.ri.gov