With a historic revenue surplus and a windfall of federal funding, lawmakers should adopt Gov. Mike Parson's plan to pay off $100 million in outstanding debt.
As we reported in late January, the governor proposed a $100 million payment would reduce the amount of interest the state has to pay on more than $2.2 billion in outstanding debt.
The payment would speed up the repayment of bonds, which would reduce the amount of interest. Parson said it should produce a savings of about $148 million over the term of the bonds. The savings would be produced by 2040.
"The bottom line is, Missouri's economy is strong," Parson said during his State of the State address. "With a historic budget surplus and federal dollars coming to our state, we want to build on our past momentum to capture even greater opportunities for the future of Missourians. But I want to remind you that our economy is strong despite federal funding."
Missouri had more than $2.2 billion in outstanding debt July 1, 2021 -- the start of the current fiscal year. That total incorporates general obligation bonds, revenue bonds, other appropriation debt and transportation debt.
Last session, the Legislature appropriated $12.4 million toward public debt for the current fiscal year. That's less than 1 percent of the state's operating budget.
But the state has a general revenue fund surplus of about $2.4 billion. That's enough to wipe out our state's debt.
We agree with State Budget Director Dan Haug that it wouldn't be responsible for Missouri to spend its entire surplus to wipe out the debt.
But likewise, we would argue it's not responsible to not pay down the debt when our state has the ability to do so. Parson's proposal is fiscally prudent, and we urge lawmakers to adopt it.
News Tribune