State Treasurer Michael Fitzgerald says the annual debt owed by state and local governments in Iowa went up nearly nine percent for the fiscal year that ended June 30th. Fitzgerald says there’s no red flags in the report that shows $10.3 billion in debt.
Fitzgerald says Iowans in general should be happy, as he says it shows communities at all levels are reinvesting in the state. He says some counties have seen their debt grow faster than others, such as Polk County, which is building a new jail.
Fitzgerald says cities had the largest debts, borrowing money mostly for utility and sewer projects. School districts had the second highest level of debt, but Fitzgerald says borrowing now isn’t such a bad thing.
He says interest rates have been low, making it a good time to borrow money. Fitzgerald says you can find out how much debt your city, school or county has by visiting the treasurer’s website.www.treasurer.state.ia.us.
Fitzgerald says the website breaks the debt down by county and you can check out your school district or city. Fitzgerald spoke to Radio Iowa via phone from New York City, where he was in the process of borrowing some big money for the state. He’s taking out a $500-million loan to cover "short term" state debts.
Fitzgerald says it’s called a "cash flow" borrowing, and he says they keep doing it even though times are good because they make a bout four million dollars in profit. Fitzgerald says the state can borrow the money at a special tax exempt rate, and then reinvest some of the money at a higher rate to make a profit. Fitzgerald says they’re hoping to make a similar profit to last year.