1/23/19 - Atlanta - Georgia Governor Brian Kemp leaves the podium after he addressed the 2019 Season Joint Budget hearings, which continued Wednesday for the 2019 amended and 2020 state budgets. Bob Andres / bandres@ajc.com
Photo: Bob Andres/bandres@ajc.com
Photo: Bob Andres/bandres@ajc.com

Georgia guaranteed lower interest rates to borrow $1 billion for construction projects

The state is about to borrow almost $1 billion for construction and other long-term projects, and this week it got some good news about how much interest it will have to pay.

Rating agencies once again liked what they saw in the state’s financial books and continued to give Georgia’s bonds a AAA rating.

Nine states have such a rating, which essentially means they can borrow at the lowest possible interest costs. That will save the state tens of millions of dollars worth of interest payments. It also, in general, means the state is in pretty solid financial shape.

Georgia has maintained that rating for many years for several reasons.

State leaders, whether Democrats or Republicans, have traditionally taken a conservative approach to both taxing and spending. The state constitution prohibits the General Assembly from spending more than the state takes in.

Georgia is considered a fairly low-tax state, and lawmakers just last year lowered the maximum state income tax rate.

State tax collections, which slowed over the winter, have picked up, and it now appears they will exceed what the government needs to fund its budget for fiscal 2019, which ends June 30. That means another surplus, at least some of which could be added to the state’s $2.5 billion rainy-day fund.

In addition, Georgia’s rate of job growth has exceeded that of the nation, according to the bond-rating agencies.

The state is borrowing this year to, among other things, buy a new election system and build hundreds of millions of dollars worth of new schools and college facilities. 

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