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- Report
- Introduction
- Accomplishments & Initiatives
- American Recovery and Reinvestment Act of 2009
- Development of the FY10-14 Capital Investment Plan
- Affordability & Fiscal Responsibility
- Aggregate FY10-14 Capital Investment Plan
- Capital Investments by Investment Category
- Appendix A - Debt Affordabiity Analysis
- Appendix B - Bond Bills
- Appendix C - Project Listing (xls)
- Appendix D - Project Descriptions (pdf)
- Plan by Investment
- Plan by Capital Agency
- Plan by Beneficiary Agency
- Downloads
- Site Map
Existing Debt Burden
Despite statutory and administrative debt limits, the Commonwealth’s debt burden remains among the highest in the nation by certain measures. A 2007 U.S. Census Bureau study of state finances ranked Massachusetts third in the nation in outstanding debt and first in the nation in debt per capita.[1] Moody’s Investors Service ranks Massachusetts fourth in total net tax-supported debt, fifth in total gross tax-supported debt (down from third last year), second in net tax-supported debt as a percentage of personal income, and second in net tax-supported debt per capita (down from first last year).[2] Standard and Poor’s Massachusetts rankings are similar: first in tax-supported debt per capita, second in tax-supported debt as a percentage of personal income, and fourth in total tax-supported debt.[3]
It is important to note, however, that these measures include certain debt issued by entities other than the Commonwealth for which the Commonwealth is not liable (e.g., $3.95 billion of debt issued by the Massachusetts School Building Authority). In addition, these measures favor other states that have stronger county governments and other political subdivisions that issue debt to finance capital improvements that are financed by state government in Massachusetts. In fact, in the most recent U.S. Census Bureau report on the matter, Massachusetts ranked 49th out of 50 states in terms of local debt as a percent of total debt (local and state debt)[4], indicating that relative to other states, many of the capital needs of the entire state are borne by the Commonwealth itself. Based on this statistic, it is safe to assume that Massachusetts would likely rank lower when measuring debt as a percentage of personal income or per capita if both state and local debt were taken into account.
In light of the Commonwealth’s large outstanding debt burden and significant need for capital investment, the Patrick-Murray Administration evaluated the administrative bond cap immediately after taking office in connection with the fiscal year 2008 capital planning process and the publication of the FY2008-2012 Five-Year Capital Investment Plan. This examination and analysis focused on the affordability of the Commonwealth’s current obligations and its capacity to support additional debt obligations. This report represents the third annual update of the analysis and the results inform the FY2010-2014 Five-Year Capital Investment Plan.
Footnotes:
[1] U.S. Census Bureau, “2007 State Government Finance Data” (http://www.census.gov/govs/www/state07.html).
[2] Moody’s Investors Service, “2009 State Debt Medians.”
[3] Standard and Poor’s, “State Debt Issuances Are Likely to Accelerate with Substantial Infrastructure Needs,” June 5, 2007.
[4] U.S. Census Bureau, “State and Local Government Finances by Level of Government and by State: 2005-06”.
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