4/26/2018 9:51:40 AM
ST. PAUL, MN – After a recent review of state bond refinancing, Minnesota Management and Budget (MMB) today announced Minnesota has locked in $300 million in savings since 2011. Like refinancing a house, the state actively monitors interest rates and identifies opportunities for savings. By refinancing state debt at the right time and taking advantage of low interest rates, Minnesota is responsibly managing debt and saving taxpayer money.
The $300 million in savings is spread out over the life of state bonds, with a savings of $12.8 million in fiscal year 2019 alone. The annual savings ranges from $12.8 million to $21.9 million over the next 10 years. These savings are reflected in the current budget forecast.
“Under Governor Mark Dayton’s leadership, Minnesota has a reputation for sound fiscal management. This is evidenced by our state having some of the highest credit ratings in the nation, with Fitch restoring Minnesota to a triple-A bond rating in 2016. As a result, we refinanced our debt, saving taxpayers millions of dollars, while also making investments in vital public works projects across the state,” said MMB Commissioner Myron Frans.
With interest rates still historically low and the State’s high credit ratings, now is the time to make substantial investments in our state’s future. Governor Dayton proposed a $1.5 billion public works bill that would make urgently-needed investments to build world-class colleges and universities for Minnesotans, and improve and repair state buildings and other critical infrastructure across the state. Given the significant need for investments in higher education institutions statewide, Governor Dayton’s proposal would invest $542 million at the University of Minnesota and Minnesota State campuses. An additional $998 million would be directed to improving state buildings, building affordable housing, repairing clean water infrastructure, and other infrastructure projects across Minnesota. View a full list of these local project proposals.
“The Governor’s 2018 public works proposal invests in much needed asset preservation across Minnesota, ensuring state facilities are up-to-date and fully functional, which allows state employees to provide Minnesotans with the services they need and the high-quality of life they know and deserve. Debt service on the Governor’s asset preservation proposal would be $10.3 million in fiscal year 2019. The savings we’ve seen through refinancing more than covers that amount. I look forward to working with the Governor and the Legislature on passing a bonding bill this session that will not only create jobs, but invest in our communities,” Minnesota Management and Budget Commissioner Myron Frans said.
According to the recent Debt Capacity Forecast, the state has $3.5 billion in available bonding capacity. The Governor’s $1.5 billion public works bill proposal remains well within that available bonding capacity.
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Contact: Keith Hovis, Minnesota Management & Budget
Director of Communications
651-259-3666, Keith.Hovis@state.mn.us
