We all know you shouldn’t spend more than what you have in your account. If you do, you need to have a plan to pay back what you borrow. Those same principles are used on a larger scale with the state government.
State Treasurer Lynn Fitch admits Mississippi will always have the need to borrow. That comes in the form of bonds. But more bonds means more debt.
“We currently just in round numbers owe about $4 billion, which is very modest for most states,” explained Fitch.
Still, the state was put on notice by the Fitch bond rating agency this year. The treasurer thinks a new five year study will help keep the state on the straight and narrow.
“For your major projects it will take bonding dollars,” said Fitch. “But for repairs, renovations, that’s where we need to be moving away from bonding.”
The treasurer’s office collected data from the state agencies that typically have the largest borrowing needs. The study shows the bond requests may reach $1.8 billion within the next five years.
Legislative leadership says even before this study they started on the track to smarter spending, especially when it comes to bonds.
“Our taxpayers are already overly burdened with taxes, regulations and with debt at the federal level,” described Lieutenant Governor Tate Reeves. “They don’t need more of any of that at the state level.”
Reeves said they’ve tried to change the attitude at the Capitol of using bonds to fill budget gaps.
“The first year we were down here we couldn’t come to an agreement because the House wanted to borrow more money than the Senate was willing to do,” said Reeves. “And so we ended up doing no new bonds.”