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Treasurer Fitch issues annual Debt Affordability Study
Cautions legislators to stay the course on prudent debt management
Jackson, MS. For the third year in a row, Treasurer Lynn Fitch has delivered an annual debt affordability study to the Governor and Legislature to help them gauge the impact of future spending and bond issuance on the fiscal health of the state.
“Prudent debt practices have helped Mississippi achieve the kind of strong credit ratings essential to economic growth and development,” said Fitch. “But, our legislators must maintain a steady course. I prepare this study each year to give them the tools they need for good budget management.”
Many states require annual debt affordability studies either by law or constitutional provision. Mississippi does not. However, credit rating agencies look favorably upon such studies as they demonstrate a long-term vision for debt management. Treasurer Fitch instituted Mississippi’s annual Debt Affordability Study in 2014.
Included in the report:
· MS has above average debt levels amongst 50 states
o MS Net Tax Supported Debt per Capita (NTSD) is $1,747
§ Has been gradually, continually increasing
o U.S. Median Net Tax Supported Debt per Capita is $1,012
§ Has dropped each of the last three years
o NTSD represents the amount of debt for every man, woman, and child
· MS is well below our constitutionally mandated debt limit
o Debt limit as of 12/31/2015 was $13.3 billion
o Outstanding total bond indebtedness as of 12/31/2015 was $4.19 billion (or 31.51% of the limit)
“The important thing for legislators to understand about this report is this is merely a tool to guide them in spending and bonding decisions,” Fitch continued. “It is not a prescription for incurring additional debt. We are well within our debt limit now, but that is simply a mathematical fact. It’s not an excuse to go on a shopping spree.”
A copy of the Treasurer’s 2016 Debt Affordability Study is available at www.treasurerlynnfitch.com.
