One of the few bright spots in the fiscal crises facing states has been the chance to take advantage of low interest rates to sell bonds and refinance debt. Washington State Treasurer James McIntire’s office held an $831 million bond sale Wednesday. Thanks to the low rates in the credit markets that meant $21.6 million saved on future interest costs of the new debt vs. budgeted expenses. It also saved $42.4 million on previously issued bonds.
Consider it like a much larger version of a home refi: The homeowner gets a lower rate and so pays less in interest over the life of the loan.
McIntire estimates that since last January, Washington has saved an estimated $647 million in debt-service costs. The bonds are used for everything for schools and roads to affordable housing and energy upgrades. Savings for the 2009-11 budget cycle reached more than $51.8 million. The estimate for debt-service savings for 2011-13 is $97.7 million. Multiple bidders competed for the latest sale, showing continued appetite for Washington bonds in the credit markets.
CityClub said it is leading a move to establish a Civic Health Index for King and Pierce counties. A press release states, “Drawn from census data, the CHI measures 40 indicators in nine categories of civic engagement, including voting, volunteerism, philanthropy, neighbor-to-neighbor connections, political expression and religious affiliation.” Boeing and The Seattle Foundation are supporting the project.
Today’s Econ Haiku:
China’s trade surplus
Will start rising again soon
Will that balloon pop?