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State Treasurer releases new study on the state’s debt

The State Treasurer wants Washington residents and the Legislature to know just how much debt the state has amassed, releasing a study on the state’s debt portfolio and other financial obligations.

The Treasurer’s 2020 Debt Affordability Study encourages transparency, educates the public on the state’s financial condition, and informs policymakers as they make budgetary and capital spending decisions.

“Washington is one of the most highly leveraged states in the country,” Treasurer Duane Davidson said in a letter prefacing the study, in which he notes that the state’s total outstanding obligations at the close of Fiscal Year 2019 totaled $21.3 billion.

Despite the state’s high debt levels, Washington’s credit rating from Moody’s was upgraded to Aaa from Aa1 in August of 2019, which is the highest possible rating from the agency.

After the credit rating bump and several refinancings in 2019 that saved the state approximately $160.4 million on a present value basis, the state is heading into 2020 with a stable financial outlook. Yet the Treasurer recommends that lawmakers consider the long-term outlook, and make sure the state is prepared to weather a recession.

“Sixty-nine percent of the state’s capital budget is funded with debt. We need to bring that number down,” Treasurer Davidson said.

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