December 2007Members of the Rhode Island Public Finance Management BoardMs. Rosemary Booth Gallogly, RI State Budget OfficerThe Honorable A. Ralph Mollis, Secretary of State, State of Rhode IslandMr. Lincoln Mossop, Public MemberMr. William Fazioli, Public MemberDear Members of the Board:I hereby submit the 2006 - 2007 Debt Management Report for the State of Rhode Islandand Providence Plantations. This report demonstrates the continued importance of closely monitoring the State’s debt position relative to the State’s borrowing capacity aspart of Rhode Island’s efforts to maintain fiscal discipline.Rhode Island’s debt burden peaked in the 1990’s and for years the State was ranked inthe top three nationally in terms of debt as a percentage of personal income and debt percapita. In recent years, debt management has been a top priority of the State resulting insignificant improvement in several long-term debt trends. As recently as 1999, RhodeIsland’s debt burden was the 5th highest nationally according to Moody’s InvestorsService. The 2006 State Debt Medians Moody’s recently published show that RhodeIsland’s ranking has dropped to 9
th
for debt per capita and 13
th
for debt as a percentage of personal income.Net tax supported debt totaled $1.54 billion at the close of FY 2006, considerably belowthe peak level of $1.88 billion reached in FY 1994. Current Budget Office forecastsproject the State’s debt level to increase to $1.70 billion by FY 2011. While RhodeIsland’s debt burden has significantly improved, it remains above the national average.Efforts to increase pay-as-you-go financing of projects, reactivate the sinking fund todefease high-cost debt or to limit, to the extent possible, issuing new debt, and improvebonds proceeds management must be continued. We are also pleased to report that in2005, the Office of the General Treasurer, the Budget Office and the Office of Accountsand Control, implemented an integrated debt management system.
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