State debt reduction called ‘sea change’
News Service of Florida
August 14, 2018
Florida has reduced debt that helps finance initiatives like roads, schools and environmental projects by more than $7 billion over the past eight years, according to a new report from the state Division of Bond Finance.
The debt amount dropped from $28.2 billion in July 2010 to $21 billion through June 30, Ben Watkins, director of the bond finance agency, told Gov. Rick Scott and Cabinet members Tuesday. That represented a 25 percent reduction.
The debt reduction, which came as Scott pursued a policy of limiting state borrowing, was “unprecedented,” Watkins said, because it reversed a long-term trend of annual borrowing by the state.
Watkins’ report also highlighted other financial improvements, including paying back $3.4 billion borrowed from the federal government to cover unemployment benefits after the last recession. The fund now has a $3.7 billion surplus, which Scott said has resulted in a reduction in the amount of payroll taxes that employers have to pay to support the fund.
“In Florida, we’ve shown that you can have a balanced budget, reduce debt and create jobs all while cutting taxes,” Scott said in a statement.
The report also noted improvements in the state’s financial ability to respond to major hurricanes.
The financial improvements, including a relatively healthy $160 billion state pension fund, has resulted in Florida earning “triple A” credit ratings from major financial rating agencies.