Should We Be Concerned About County Debt?

The County Controller released the 2012 Comprehensive Annual Financial Report last week and foremost among the Controller’s concerns is the debt, which, when examined by the "net bonded debt" marker was $825 million, up from $747 million in 2011. The County administration stated that 2012 was a bit of an outlier, "the result of the county squeezing two years’ worth of new loans into one". If that is the case, it is worth looking at data prior to then to see if there is a trend.

From 2003 to 2011, net bonded debt grew 14.7% (from $651 million to $747 million) while population fell 2.9% and, as a result, the per capita debt level increased nearly $100 from $517 to $611. Compared to the City of Pittsburgh’s per capita debt, the County is in great standing. The ratio of debt to assessed valuation has remained around 1% or fractions above 1% for most of those years and, if we treat things in terms of legal debt limit, the County was in 2011 and has been since 2003 using 80% or more of that limit. Debt service as a percentage of non-capital expenditures is a tad over 4% and has been about that percentage over the time frame.

The previous Controller in 2010 called for a long-term debt policy that would act as "…a strategic tool for determining affordability and setting priority for financing capital projects".