Debt now accounts for 7.8% of state budget
Paying off California’s old debts is already consuming 7.8% of the state budget, and that figure would grow even larger if voters continue to approve new borrowing for roads, schools and waterways.
That’s a key finding in an annual report on California’s indebtedness from Treasurer Bill Lockyer. The report is a sobering look at how the state’s debt burden has risen in the last decade, from 3.57% of the budget in 2003-04 to more than double that now.
In the coming decade, Lockyer said, if voters approve no additional borrowing and the state merely finalizes the additional borrowing that voters have already authorized, the portion of the budget dedicated to paying off debt would dip only slightly, to 6.8%.
Lockyer urged lawmakers and the governor to carefully balance any new borrowing for infrastructure with the need to pay for government programs, such as education and healthcare for the poor.
“California’s recovery from the recession will not be quick,” Lockyer said. “The next 10 years will require sustained fiscal discipline and hard work.”
California’s current debt, which has been steadily growing, now adds up to $2,542 per person, according to the Moody’s, the credit-rating agency. The median of all states is $1,066.
-- Shane Goldmacher in Sacramento