Some of Gov. Rick Scotts vetoes following the 2011 session are paying off.
On Tuesday, a day before he releases his proposed budget for the next fiscal year, Scott said his approach will remain cautious.
I dont want to burden future generations on debt that we should be controlling in our state. I think the same thing about the federal government, Scott told reporters following the Cabinet meeting.
Im going to continue to be very cautious on debt, he added. The coverage numbers suggest we cant afford more debt.
For the first time in 20 years, the state has seen a reduction in its debt,Ben Watkins, head of the state Division of Bond Finance, told members of the Florida Cabinet.
Weve looked at it for 20 years and thats the first time its gone down, Watkins said. Looking at it analytically, we borrowed less money than we paid off over the course of the fiscal year.
Part of the decrease is the result of Scotts veto of borrowing $135 million projects, such as university construction and environmental land purchases, Watkins said.
Overall, the states debt level stands at $27.7 billion, down $500 million from a year ago.
Watkins said the state will have to spend $2.2 billion in the next fiscal year just to cover the money owed.
The three largest areas that cause the debt are: school construction, whichaccounts for $15.9 billion, or 57 percent of the debt; transportation, which takes in $7.2 billion, 26 percent; and land conservation, which is $2.9 billion, 10 percent.
Additional factors in the states debt are recurring annual debt service requirements on existing obligations, whichare $2.2 billion. The benchmark debt ratio of 7.46 percent remains in excess of a 7 percent policy cap.
General fund reserves of $1 billion at June 30 are down from 2010 but are projected to increase to $1.4 billion during the current fiscal year. Total reserves, including trust fund balances, were $3.4 billion at June 30 and are expected to decline to $3 billion during the current fiscal year.
State ratings are very strong -- AAA, AAA, Aa1 --but are vulnerable to lagging economic recovery and budgetary challenges.
State debt relative to U.S. federal government and European sovereign debt is rather small.
Reach Jim Turner at jturner@sunshinestatenews.com or (772) 215-9889.
