As every family knows, debt is the way most of us finance the big purchases in life, including homes, cars, and a college education. Similarly, California’s state and local governments often use debt to finance needed facilities.
The state and communities assume this debt, often acquired through the issuance of bonds, in order to fund the building, improvement or maintenance of such community assets as schools, hospitals, bridges, ports, roads, water systems, libraries, parks, courts, jails, airports, and more.
In addition to funding infrastructure, government debt is sold to refinance older debts as a way to reduce interest costs and save taxpayers money. In her first six months in office, for instance, Treasurer Fiona Ma’s team refinanced voter-approved General Revenue bonds resulting in a savings to taxpayers of $1.42 billion over the next 19 years.
Ever wondered who keeps track of all this debt issued by California government agencies? The answer is the California Debt and Investment Advisory Commission (CDIAC). Treasurer Ma chairs its board, which consists of nine members, including the Governor or his Director of Finance, two local government finance officials appointed by the Treasurer, two Assembly Members and two Senators.
CDIAC is responsible for improving the practice of public finance across California by providing responsive and reliable information and guidance to state and local public agencies and other public finance professionals.
For example, CDIAC and the Goldman School of Public Policy at the University of California Berkeley are currently offering a series of three webinars designed to provide public finance officials with the practical guidance needed to meet the public’s growing interest in seeing climate friendly infrastructure projects funded through such green financing mechanisms as the sale of government-issued “green” bonds. The three webinars cover everything from the fundamentals of green financing, to certification and current market responses to green financing.
CDIAC also acts as a clearinghouse for public information on the billions of dollars in debt issued each year by state and local governmental bodies. It has been collecting this data since January 1982. Over that time, California public agencies have reported issuing over $1.5 trillion in debt.
In 2018, approximately $62.7 billion was issued. As of June 2019, $32.1 billion has been issued. CDIAC publishes this sort of data on reports of debt recently sold, or proposed for sale, in its DebtLine newsletter. It’s a great source of information for the public as much as for policymakers.
CDIAC also boasts a website set up specifically to help taxpayers learn how much debt has been issued by their communities. Viewers can use this same website to learn about the projects being financed by this debt. The website, called DebtWatch can be found at: http://debtwatch.treasurer.ca.gov/.
Note: Each month we will be sharing information on one of our BCAs and explain how the programs behind the acronym are enhancing the lives of Californians all across the state -- and how you, your family, or your business can share in, and contribute to, California's prosperity