|Posted:||April 23, 2015 05:07 PM|
|From:||Representative Steven C. Mentzer and Rep. Matt Gabler|
|To:||All House members|
|Subject:||Capital Facilities Debt Reduction|
|In the near future, we will introduce legislation to control the rate that the Commonwealth accumulates Capital Facilities debt and reduce our General Obligation (GO) debt and debt service over time.
In Fiscal Year 2002-03 (the last fiscal year of the Ridge/Schweiker Administration), the Commonwealth’s GO Debt (including non-highway capital facilities debt, voter approved debt and disaster relief debt) totaled about $6.5 billion and the annual debt service (the annual payment on our debt obligation) was $701 million. As you know, debt spending substantially increased during the Rendell Administration. An analysis of the Commonwealth’s GO debt and debt service for the 11 years starting with the year immediately prior to the Rendell Administration and ending with FY 2014-15 shows the following:
This legislation amends the “Capital Facilities Debt Enabling Act” to establish an annual spending limit on two categories of projects under the “Capital Facilities Debt Enabling Act.” Effective July 1, 2015, and each year thereafter, new project releases would be limited to the following:
Projections show that if we put these reasonable limitations in place, the Commonwealth’s GO debt will reach a high in 2018 and then incrementally decrease every year thereafter.
This is a measured, long-term approach to a very serious problem and I urge you to add your name to the list of cosponsors of this legislation.
Introduced as HB928