SALT LAKE CITY – November 1, 2023 – The Utah Office of State Treasurer has published the State’s second-ever Debt Affordability Study.
During the 2022 General Legislative Session, the legislature passed House Bill 82, which establishes a commission of State officials to oversee the borrowing and lending activities of the State and requires the Office of State Treasurer to publish an annual Debt Affordability Study on or before November 1 of each year.
The study is intended to inform legislators, investors, rating agencies, and all Utahns on the State’s outstanding tax-supported debt obligations, debt practices, and perspectives of the state treasurer on the prudent use of debt. It does not, however, constrain or compel policymakers in any way.
Utah has a well-established reputation for its strong public governance and prudent fiscal management. While the State has demonstrated commendable fiscal management, the Debt Affordability Study aims to offer a straightforward overview of our financial well-being that is readily accessible to both State leaders and the general public. Here are a few highlights from this year’s study:
- Utah’s debt stands at 18.9% of the Constitutional Debt Limit, at least a 35-year low in the relative debt levels of the State as determined by a percentage of allowable debt under the Constitution.
- There are currently $314 million of outstanding, statutory General Obligation (GO) bond authorizations. However, the projects specified in the statutory authorizations were appropriated cash funding through legislative action in 2022 SB6, except for two projects totaling $20 million. Consequently, current authorizations for GO debt, with this small exception, are not issuable without further legislative action.
- The State Building Ownership Authority (SBOA) has $15.7 million in outstanding legislative authorizations for lease-revenue bonds. These authorizations are for two new Department of Alcoholic Beverage Services (DABS) stores: one in Summit County and one in Washington County. Funding for these two stores is expected in 2024. However, issuing less than $50 million in bonds generally constitutes an inefficient transaction. Consequently, the state treasurer recommends funding these stores with General Fund appropriation.
Staff from the Utah Office of State Treasurer are available address any questions pertaining to the study or generally regarding the State’s credit rating and debt management.
CLICK HERE to download the 2023 Debt Affordability Study.