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Debt Administration
The ratio of net bonded debt to assessed property value and the amounts of bonded debt per capita are
considered to be useful indicators of the State's debt position to State management, citizens and investors.
Data for fiscal years 1986 and 1987 are shown as follows:
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Ratio of Net
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Ratio of
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|
|
|
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Bonded Debt
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Debt to
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|
|
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Amount
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to Assessed
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Present
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Bonded
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(expressed
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Value (50.8% of
|
Market
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Debt Per
|
|
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in thousands)
|
Present Market)
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Value
|
Capita
|
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General
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|
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|
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obligation bonds:
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|
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1986
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$2,110,075
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3.18%
|
1.61%
|
$480.00
|
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1987
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2,030,415
|
2.78
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1.41
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454.84
|
Additionally, outstanding limited obligation bonds of the Department of Transportation amounted to
$387,565,000 at June 30, 1987. Debt service on these bonds is provided principally by excise taxes levied by
statute. Self-supporting revenue bonds outstanding at June 30, 1987 were $1,740,884,000. Long-term
obligations for accrued retirement costs of $507,026,000 represent the excess of retirement costs over
retirement expenditures since 1978 and are being funded on a long-term basis through annual contributions,
principally from general fund revenue. Long-term obligations for accrued annual leave of $81,704,000
represent the value of accumulated earned but unused annual leave for general government employees at
June 30, 1987.
In 1978, the Capital Debt Affordability Committee was created to study the State's debt structure and to
recommend maximum limitations on annual debt authorizations. Although the recommendations of the
Committee are not binding on the State's General Assembly, the amounts of annual general obligation bond
authorizations for 1987 were within the limits established by the Committee. For the fiscal year 1987, new
general obligation bond authorizations amounted to $230,000,000.
The following tabulation shows the general obligation bonds issued during the past three fiscal years:
State of Maryland—General Obligation Bonds
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Date of Issue
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Amount
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Average
Life in Years
|
Effective
Interest
Rate
|
Interest Cost
Per Borrowed
Dollar
|
|
September 1, 1984
March 1, 1986
July 15, 1986
|
$138,990,000
124,585,000
164,645,000
|
10.1
10.2
9.9
|
8.78%
6.50
6.68
|
88.9
65.1
66.0
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Since June 30, 1983 the State has redeemed more general obligation bonds than it has issued, resulting in
a decline in general obligation bonds outstanding of $379,475,000.
Maryland's general obligation bonds have been rated Aaa by Moody's Investors Service and AAA by
Standard and Poor's for a number of years.
Additionally, limited obligation bonds issued by the Department of Transportation and self-supporting
revenue bonds issued by enterprise agencies amounted to $140,590,000 and $360,345,000, respectively,
during 1987.
Cash Management
During the year, temporary surpluses of cash in general governmental funds were invested in repurchase
agreements and U.S. Treasury and agency obligations with maturities ranging from one to 181 days and in
time deposits ranging from 180 to 365 days. For the fiscal year ended June 30, 1987 the State's cash resources
for general governmental funds were invested as follows: in repurchase agreements, 82.7 percent; in United
States Treasury and agency obligations, 17.0 percent; and in certificates of deposits, 0.3 percent. The average
yield on maturing investments during the year was 6.4 percent, as compared to 7.6 percent in the prior year,
and the amount of interest received was $65,436,000, which was $29,028,000 less than the previous year.
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