County Debt Piling Up
Last week, the Board met for a briefing on the general fiscal situation in the county and to discuss county debt and the expected trend going forward. With respect to our debt load, the picture is concerning, to say the least.
Below is a graph of the county’s debt service levy since 2007 and as projected through 2016 (measured in millions). The red line represents debt issued by the County Board; the black line represents the debt issued by the County Board combined with the debt issued by the Hennepin County Regional Rail Authority. The County Board and the Rail Authority are separate legal entities but are made up of the same seven members.
The debt service levy is the amount county taxpayers must expend each year to cover the cost of debt incurred in the past. As you can see, that amount has essentially doubled in less than ten years. As of 2015, according to this chart, hennepin county property taxpayers will be spending $100 million every year just to pay off past borrowing.
The real concern, however, is not reflected in this graph. The debt service amounts in the graph after 2012 are accurate only to the extent that the County Board/Rail Authority does not add any new bonding projects to our capital improvements budget going forward.
In fact, at our meeting last week, county administration outlined for us several projects that are deemed necessary in the near future that are not included in the graph: Over $100 million in general county debt and over $200 million in rail debt. And that does not include future projects that we haven’t dreamed up yet (of which there will likely be plenty).
Unfortunately, if things go as planned, the plateau on the graph which starts in 2015 will actually turn into an increase even sharper than in past years.
We frequently hear about debt concerns at the federal level (and, to a lesser extent, the state level), but it’s time for taxpayers to take note of Hennepin County’s debtload, as well.