|Iowa's Debt Reaches Record High|
|Written by Amy Langdon|
|Friday, 30 November 2012 14:32|
4,704. That's how many dollars of debt Iowa governments have racked up for each resident of our state.
According to a report from the state treasurer's office, that's an all-time high for Iowa - $14.4 billion dollars in total government debt run up by counties, cities, school districts and other public groups. But you can't blame Oskaloosa and Mahaska County for those record numbers. CRI asked city, county and state officials how much governments in our areas owe and what that means for local taxpayers.
Right now, Mahaska County doesn't owe any money.
"It's just good policy," says County Supervisor Ken Rozenboom.
He says staying debt-free is about planning ahead, like the county did when paying for improvements to the Eveland Bridge.
"It was installed or rebuilt 3 or 4 years ago. There were federal highway and bridge funds available for that. You get so much a year and you have to accumulate those over a period of years and not spend them on other projects," says Rozenboom.
Let's compare Mahaska County's debt to that of some nearby counties. Marion County owes $4,385,000, that's $132 per resident. Wapello County has more than $2 million in debt or almost $60 per resident. The county most in debt per person in Iowa is Winnebago in north central Iowa. It owes almost $2,500 per resident.
Outgoing State Senator Tom Rielly says debt doesn't have to be seen as a bad thing, and can actually be very helpful when a city or county needs to fund a large project. Especially when interest rates are low and it's cheaper to borrow money.
"We have to be good stewards. We have to have a good reason to borrow. Take advantage of low interest rates. Whatever project it is, has to far outlast whatever the bond is, have a dedicated revenue stream, and have significant support for whatever project that might be," says Rielly.
Bonds are often used to raise money for public projects. The bonds are sold by the city or county to investors, who are paid back later with interest, either from tax revenue or from the profit produced by the project. For example, a bond could be taken out for a sewer system and paid back once that system is generating revenue.
The city of Oskaloosa does have debt. About $8.5 million worth. That's $745 per resident. City Manager Michael Schrock says the debt comes from things like waste water improvements and road construction.
"In some instances, we just don't have any control over it. If the state comes in and from a regulatory side says you have to treating your waste water at a higher level. We don't necessarily have $4 or 5 million dollars sitting in the bank and we have to go out and borrow for that," says Schrock.
Oskaloosa's debt is lower than that of some neighboring cities. Pella owes $8.9 million, $859 per resident. Ottumwa owes $28 million. More than $1,100 per resident. But Coralville, next to Iowa City, owes almost $15,000 per resident, more than any other city in the state.
"We continue to pay off debt every year. I know since I've been here the debt service has gone down as far as what we owe. I see that trend continuing," says Schrock.
For more information on how other cities and counties compare to Oskaloosa and Mahaska County, click HERE.