|Posted:||January 20, 2017 03:05 PM|
|From:||Representative Steven C. Mentzer|
|To:||All House members|
|Subject:||Debt Reduction - Prior HB 928|
|In 2013, the General Assembly took a historic step to reign in our debt spending by lowering the statutory debt ceiling on Redevelopment Assistance Capital Projects (RACP) by $600 million. In the near future, I will introduce legislation to continue this effort to control our capital debt obligations and annual debt service.
From 2002 through 2010, the statutory debt ceiling for RACP was increased five times. In 2002, the RACP debt ceiling was $1.45 billion. A short eight years later, that ceiling climbed to an astonishing $4.05 billion. Using an average inflationary rate, the RACP debt ceiling should be about $2 billion.
During this same time frame, RACP project releases skyrocketed from an average of $245 million per year under the Ridge/Schweiker Administration to $547 million under the Rendell Administration. In his last year in office, Rendell released $1.025 billion in new projects. These projects are funded through borrowing – bonds amortized over a 20-year period.
In 2013, the debt ceiling was lowered to $3.45 billion. My legislation will continue to reduce the RACP debt ceiling by an additional $500,000,000. Beginning July 1, 2018 (the year in which the RACP debt obligations under Rendell peaks), and each year thereafter, the debt ceiling would be lowered by $50 million increments until it reaches $2.95 billion (on July 1, 2027). These reductions will ensure that, as we endeavor to pay off the debt accumulated under the Rendell Administration, we maintain a leaner, more transparent, RACP program.
The rationale for this legislation is fairly simple: By limiting our borrowing, we decrease our debt load and debt service over time. As debt service decreases, our available dollars to fund core government services increases.
I would greatly appreciate your consideration of this bill and encourage you to sign on as a cosponsor.
Introduced as HB80