The municipal bonds sold by the state of Florida are ready to become much more scarce.

This is because Governor Ron Desantis plans to pay the debt of $ 1.7 billion of taxes as part of his budget proposal for the fiscal year that begins in July. The expenses plan, called “focus on the Fiscal Responsibility Budget,” is based on its existing debt reduction program.

Florida has been stopping her liabilities for years and Desantis has become a priority since she assumed the position in 2019. The State had approximately $ 15.4 billion of direct debt pending at the end of the last fiscal year, according to an annual debt report prepared by The Bond Finance Division. That is a 40% drop since 2015, according to the data. Direct debt includes tax supported bonds and those insured by self -sufficient income such as road tolls.

Desantis has proposed to assign additional $ 830 million in next year’s budget to remove pending bonds, with a portion for the debt that supported the Everglade restoration. These funds complement the $ 870 million of debt payments already scheduled for next year, according to Ben Watkins, director of State Bonds Finance.

Less debt means that the State can reduce some of its fixed costs, such as paying interest and principles to bond holders every year. That releases the future expense that Florida can store or invest in other priorities.

“That leaves them more financial flexibility to respond to other needs that may arise, as if they were beaten with another important hurricane,” said Denise Rappmund, vice president of Moody’s qualifications. Florida has first -level credit grades of the Moody’s, S&P and Fitch grades.

Income growth

Desantis included a group of investments in its proposed budget, including giving some lifeguards a salary increase of 25% and spending almost $ 30 billion in K-12 education. Their plans include having $ 14.6 billion in reservations. Maintaining reservations is a priority for Florida “to effectively respond to storms and unforeseen disasters,” said his proposal.

Nationally, state liabilities have decreased widely due to the federal aid of the pandemic era and strong income growth, a trend from which Florida has benefited. The State does not collect an income tax, so it depends more on sales tax revenues, which have been solid as prices increased due to inflation.

“They were already growing in terms of population, but during that pandemic period it increased more than in other states, said Rappmund.” The benefits of that were harvested. “

The State is estimating just over $ 50 billion of general revenues in the next fiscal year, approximately 0.8% more than last year, according to the budget proposal.

Last year, as part of the debt reduction program, Florida offered to buy around $ 500 million of its bonds in circulation in a first cash bidding offer. Watkins said Back Back saved the State for more than $ 200 million.

Read more: Florida in cash tries to buy your bonds for the first time

“Florida’s firm commitment to fiscal conservatism is the reason we are in such a good financial form,” said Desantis in a statement on Monday.

Florida also has the ability to issue more debt, if you need to do it. The State has approximately $ 31 billion of debt capacity in fiscal year 2025, according to the State Debt Report.

“The conclusion for policy formulators is that there is a significant debt capacity available if a debt is needed to accelerate strategically important infrastructure projects,” according to the December report.

The governor’s budget proposal is the first step to negotiate the next expenses plan. The regular legislative session of the State begins on March 4 and legislators will write a draft budget law that probably adjusts.

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