Compendium of Budget Information for the 2009 General Session

Capital Facilities & Government Operations
Appropriations Subcommittee
Subcommittee Table of Contents

Agency: Debt Service

Function

Debt Service is made up of interest and principal due on the state's bonded indebtedness. The state uses long-term debt to finance large capital expenditures including new buildings, major remodeling, and highway projects. Dedicated revenue streams such as enterprise fund revenue or dedicated lease payments secure some bonds. Debt service on general obligation and revenue bonds is included in this appropriation.

Statutory Authority

Constitutional Debt Limit: Article XIV, Section 1 of the State Constitution limits the total general obligation indebtedness of the state to an amount equal to 1.5 percent of the value of the total taxable property of the state.

Statutory Debt Limit: UCA 63-38c-402 limits the maximum general obligation borrowing ability of the state at any given time to no more than forty five percent of the maximum allowable state budget appropriations limit set in UCA 63-38c-201 (a formula that reflects changes in population and inflation). Some highway bonds are exempt from this debt limitation.

UCA 63B-1-201 creates the State Bonding Commission composed of the governor, state treasurer, and a third person appointed by the governor.

UCA 63B-1-202 requires all legislation authorizing the State Bonding Commission to issue bonds to contain an estimate of the annual amount of funds necessary for operation and maintenance of each project.

UCA 63B-1-304 creates the State Building Ownership Authority composed of the governor, state treasurer, and the chair of the State Building Board. The authority may, among other things, borrow money and issue obligations (including refunding obligations), pledge revenues from any facility to secure the payment of obligations relating to that facility, cause to be executed mortgages, trust deeds, and other documents, own, lease, operate and encumber facilities, and rent or lease any facility to any state body. Any obligations issued by the authority may not constitute general obligation debt of the state and must be legislatively authorized.

UCA 63B-1-307 requires the State Building Ownership Authority to lease space back to the agency for which obligations were issued. Rent amounts must be sufficient to pay off the principal and interest as they come due.

UCA 63B-1a, known as the 'Master General Obligation Bond Act,' authorizes the State Bonding Commission to issue bonds only if the Legislature has affirmatively authorized the issuance of the bonds, the capital projects to be funded, and the maximum amount of the bonds.

Article XIII Section 5(3) of the State Constitution requires a tax levy to pay off general obligation bonds within 20 years while UCA 63B-1a-101(4) limits maturity dates to 15 years unless otherwise directed by the Legislature.

UCA 63B-1a-301 requires that a sinking fund be created to pay debt service on general obligation bonds. The State Treasurer administers the fund and deposits monies into the fund as necessary to pay debt service. Any bond monies remaining after a project is completed are to be deposited in the sinking fund.

UCA 63B-1a-303 levies a direct property tax each year after bonds are issued until they are paid off, sufficient to pay principal, interest, and premiums on each bond. However, subsection (5) abates the tax to the extent money is available from other sources.

UCA 63B-1a-601 allows the State Bonding Commission to issue bond anticipation notes that represent a general obligation of the state. Notes are payable from proceeds of the sale of bonds and/or other monies of the state.

Funding Detail

General Fund and Education Fund are typically appropriated to pay general obligation debt service on buildings. Centennial Highway, Critical Highway Needs, and County of the First Class transportation restricted funds are used to pay general obligation debt service on highways.

Lease payments are collected from agencies occupying buildings constructed with lease revenue bonds and those payments are recorded as dedicated credits within the debt service line item. In FY 2008 the University of Utah and the State of Utah defeased over $100 million of SBOA lease revenue bonds.

Sources of Finance
2005
Actual
2006
Actual
2007
Actual
2008
Actual
2009
Approp
General Fund $61,721,600 $57,181,700 $51,679,700 $51,679,700 $44,679,700
General Fund, One-time $0 $2,698,000 $0 $0 ($12,000,000)
Uniform School Fund $17,164,300 $17,164,300 $0 $0 $0
Uniform School Fund, One-time $1,682,400 $0 $0 $0 $0
Education Fund $0 $0 $17,164,300 $17,164,300 $17,164,300
Centennial Highway Fund $125,371,200 $126,393,400 $127,976,800 $127,976,800 $133,826,800
Centennial Highway Fund, One-time $0 $0 $0 $3,650,000 $0
Dedicated Credits Revenue $58,508,100 $25,252,700 $30,207,800 $125,527,800 $29,820,000
Dedicated Credits - GO Bonds $0 $0 $15,200 $3,261,900 $0
TFR - County of First Class State Highway Fund $2,190,300 $7,204,400 $7,204,400 $6,950,000 $14,100,000
Transfers $6,834,600 $7,628,300 $3,574,200 $0 $0
Beginning Nonlapsing $12,841,000 $12,635,900 $20,722,200 $23,534,200 $27,231,400
Closing Nonlapsing ($12,635,900) ($20,722,200) ($23,534,200) ($26,569,300) ($8,116,900)
Total
$273,677,600
$235,436,500
$235,010,400
$333,175,400
$246,705,300
 
Line Items
2005
Actual
2006
Actual
2007
Actual
2008
Actual
2009
Approp
Debt Service $273,677,600 $235,436,500 $235,010,400 $333,175,400 $246,705,300
Total
$273,677,600
$235,436,500
$235,010,400
$333,175,400
$246,705,300
 
Categories of Expenditure
2005
Actual
2006
Actual
2007
Actual
2008
Actual
2009
Approp
Current Expense $273,677,600 $235,436,500 $235,010,400 $333,175,400 $246,705,300
Total
$273,677,600
$235,436,500
$235,010,400
$333,175,400
$246,705,300
Subcommittee Table of Contents