California’s debt load equals an estimated 6.79 percent of the state’s general fund for the current budget year, the lowest level since the depths of the recession, according to the latest debt-affordability report from state Treasurer John Chiang.
The debt load, though, ranks among the highest as a share of personal income, population or gross domestic product, according the report. Among the 10 largest states, only New York and Illinois have higher debt loads under those measurements, according to the report.
“Too much debt may mean that a state, municipality or household is living beyond its means,” the report said. “However, just as it did in California in 1960, high levels of debt may also indicate that a state or community is making required investments that benefit all of its citizens.”
Referring to lower debt loads in other states, the report says, “When examining these ratios, it is important to remember that not all of the states listed use their debt for the same purposes or at the same scale.”
California has outstanding general obligation debt totaling $76 billion, with another $30 billion in bonds authorized but not sold. For 2015-16, the state will make an estimated $7.8 billion in debt service payments.
California voters have authorized more than $135 billion in general fund borrowing since 1974. The state is on track to sell about $3.3 billion in debt in the current fiscal year.
Here is the debt service ratio for the past several fiscal years:
Debt service ratio to general fund revenue