Debt Affordability Advisory Committee Adopts Report Updating the State’s Borrowing Capacity

The state's Debt Affordability Advisory Committee (DAAC) voted today to approve a study that concluded the state has sufficient debt capacity to borrow nearly $2 billion in each of the next 10 years for capital projects and $155 million annually for transportation projects.

The nine-member DAAC, chaired by State Treasurer Brad Briner, drafts the annual debt affordability report. The analysis provides the governor and General Assembly with an overview of the state's debt load and borrowing capacity of the General, Highway and Highway Trust funds. It serves as a tool for sound debt management practices and setting spending priorities.

The debt capacity is directly related to the state's creditworthiness, which continues to be rated triple-A, the highest mark issued by the three major credit rating agencies.

The study determined the General Fund debt capacity is $11.68 billion in 2026, or $1.93 billion annually if spread equally over the next 10 years. The Highway Trust Fund debt capacity is $920 million in 2026, or $155 million if spread in equal amounts over the next 10 years.

The report shows that if no further debt is authorized, the state's General Fund debt service will decline more than 85% over the next 10 years and will be eliminated by June 30, 2039.

The annual report is required by statute, which also directs the committee to recommend any other debt management policies it considers desirable and consistent with the sound management of the state's debt. DAAC is staffed by the Debt Management Section of the Department of State Treasurer's State and Local Government Finance Division.

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