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State Debt

State Obligations Outstanding

(September 2, 2010, dollars in millions)

General Obligation (G.O.) Bonds	$5,714
Equipment Leases	21
Real Estate Financing	163
Certificates of Participation	74
Agency Obligations: Housing Finance Agency University of Minnesota Office of Higher Education State Colleges and Universities Board Higher Education Facilities Authority State Armory Commission Rural Finance Authority Public Facilities Authority Agricultural & Economic Development Board IRRRA (Giant's Ridge Rec. Area) Minnesota Management and Budget	2,607 871 590 191 953 3 35 946 466 10 141
Total Agency Obligations	6,813
Total, All Obligations	$12,785
G.O. debt authorized but not yet issued	2,598
Line of credit for cash flow	600

Source: Minnesota Management and Budget

Capital Investment Guidelines

• Total tax-supported principal outstanding shall be 3.25 percent or less of total state personal income. (As of November 30, 2010, the total was 2.6 percent.)
• Total amount of principal  (both issued and authorized but unissued) for state general obligations, state moral obligations, equipment capital leases, and real estate capital leases are not to exceed 6 percent of state personal income. (As of November 30, 2010, the total was 4.64 percent.) 
• 40 percent of G.O. debt shall be due within five years, and 70 percent within ten years, if consistent with the useful life of the financed assets and market conditions.

State Bond Ratings

For the September 8, 2010, bond sale, Standard & Poors Ratings Group and Fitch Ratings, each rated the state's bonds at the highest ratings (AAA), indicating the state's capacity to pay interest and repay principal is strong. A good rating reduces the interest rate the state has to pay. Moody's Investors Service, Inc., rates the state's bonds as Aa1. As the bond sale statement says, these ratings are subject to change or withdrawal by the ratings agencies at any time.

Related links:

• Legislative Reference Library Links to the World: Economics and Government Finance

Originally published January 2011.