- Gov. Ron DeSantis of Florida announced an early paydown of $400 million in active debt through the payoff of bonds before maturity, avoiding interest costs.
- The Debt Reduction Program, part of the state’s Fiscal Year 2023-24 budget, facilitated the early payoff and aims to eliminate various avenues of debt ahead of schedule.
- Florida’s total debt decreased to $16.0 billion, the lowest since FY 1999, and the benchmark debt ratio was 3.78 percent in FY 2022, remaining below the 6 percent target for the ninth consecutive year.
Gov. Ron DeSantis announced on Wednesday that the state has made an early paydown of $400 million towards active debt through the payoff of bonds prior to maturity, avoiding accruing interest costs.
The payoff was facilitated through the Debt Reduction Program, which was established as part of the state’s Fiscal Year (FY) 2023-24 budget. Amidst its inception, DeSantis maintained that the program would allow the state to eliminate various avenues of debt ahead of schedule.
The reduction program, which operates within the Division of Bond Finance, confirmed two transactions within the past week that terminated outstanding taxable Public Education Capital Outlay (PECO) and State Revolving Fund (SRF) bonds.
Per the Executive Office of the Governor, the transactions were executed through the utilization of $200 million in appropriated funds, supplemented by additional economic resources. The early payoff is estimated to culminate in $34 million of savings for taxpayers.
According to the Division of Bond Finance, Florida’s total debt amounts to $16.0 billion at the end of FY 2023, marking the lowest level since FY 1999. The benchmark debt ratio (debt service to revenues) also decreased to 3.78 percent in FY 2022 as a result of increased revenues and remained under the 6 percent target for the ninth consecutive year.
“While Washington has governed irresponsibly and ballooned the national debt, the Free State of Florida is providing a blueprint for fiscal responsibility,” said DeSantis. “We put Floridians front and center in every decision we make and are proud to continue saving them money through smart fiscal policy.”
Per state documents, since peaking in 2010, outstanding debt in Florida has declined by more than $12 billion, or more than 43 percent while the benchmark debt ratio for 2023 will be less than half of what it was in 2010. State economists also report that debt obligations “remain manageable” at a relatively low level and contingent liabilities pose less risk for the current FY.
A prepared statement further asserts that Florida has now paid down approximately $5 billion in state debt since DeSantis took office in 2018, with additional payoffs expected over the fiscal year.