Florida has now reduced its debt for three years in a row, reports Lloyd Dunkelberger for the Herald Tribune, with a record $1.6 billion drop in the recently finished budget year. As of June 30, the state borrowed $24.6 billion less; $3.6 billion below its $28.2 billion peak in 2010.
Following the example set by many other states during the Great Recession beginning in 2008, Florida became increasingly cautious about its finances. As a result, Moody’s Investor Services ranked the state, as well as the federal government, with adding to its debt load at the slowest rate in decades.
Dunkelberger attributes this debt reduction to the “hallmark” of Gov. Rick Scott’s administration — a reluctance to borrow money. However, this approach also affects several key government programs.
For example, there are no new bonds for Public Education Capital Outlay (PECO) program, which pays for educational buildings for state universities, colleges and other public schools. The Florida Forever environmental land-buying program, once budgeted at $300 million, also had no further financing.
To balance the limited borrowing, Florida aggressively refinanced debt of over $2 billion, receiving massive savings from lower interest rates.