Report says California’s bond debt load exceeds $99 billion
Amid a projected $18 billion budget shortfall for the 2026-27 fiscal year, the state is also dealing with $99.1 billion in bond debt, according to a new report.
The report released by the California Debt & Investment Advisory Commission shows that the state and local debt load sits at $99.1 billion, and long-term debt across the state makes up $90.1 billion. That debt load is up 11.6% over the five-year average, the report states, and is up 8.8% year-over-year.
“I always say the insidious thing about taking a loan out is that you’ve got to pay it back,” state Sen. Roger Niello, R-Roseville and vice chair of the Senate Budget and Fiscal Review Committee, told The Center Square on Monday. “I tend to be very conservative on that because of that fact that you have to pay it back. If there’s any part of today’s budget difficulties that are motivating us to go to the bond market to help pay for things that the general fund can’t, that’s a huge mistake.”
An additional $7 billion in debt has been proposed statewide, according to the report. Local governments in California, additionally, have taken on $71.3 billion in local debt. That is driven, in large part, by the energy sector, the report states.
Electricity demand increased significantly between 2021 and 2024 in places where artificial intelligence data centers were built or expanded, according to the report. Debt issuance went up by 30% in that time, mostly to help pay for supporting electric systems, renewable energy projects and grid modernization.
Government-run joint power authorities that help supply energy to private electrical companies took on the most debt in that time period. Approximately 40% of the electricity consumed by private utility companies is purchased through these agencies, and those agencies are able to get tax-free bonds to help pay for increased electricity infrastructure to meet the higher demand generated by AI data centers, according to the report.
Those bonds essentially pre-paid renewable energy for customers of these agencies for the next 30 years, the report states.
“My first impression is that we’re kicking off our problems to the future,” said Wayne Winegarden, a senior fellow in business and economics at Pasadena-based Pacific Research Institute.
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Wow, Calif state and local debt load sits at $99.1 billion!! That sounds like a whole lot, doesn't it???
Meanwhile, Texas local government bond debt has surged to nearly $552 billion as of fiscal year 2025, driven largely by school district construction and infrastructure projects.
Oh wait, you're from Fla, right sunstroke??
As of late 2025, Florida's total state and local government debt was approximately $241.6 billion, according to analysis from the Reason Foundation.
Oh wait, we weren't supposed to compare California to the big red states were we?? We weren't supposed to put that number in context, were we???
Municipal bonds sold by the state of Florida are poised to become much scarcer.
That’s because Governor Ron DeSantis plans to pay down $1.7 billion of tax-supported debt as part of his budget proposal for the fiscal year that begins in July. The spending plan — dubbed the “Focus on Fiscal Responsibility Budget” — builds on his existing debt-reduction program.
Florida has been paring its liabilities for years and DeSantis has made it a priority since he took office in 2019. The state had roughly $15.4 billion of direct debt outstanding at the end of the last fiscal year, according to an annual debt report prepared by the Division of Bond Finance. That’s a 40% drop since 2015, the data shows. Direct debt includes tax-backed bonds and those secured by self-sustaining revenue like highway tolls.
DeSantis has proposed allocating an additional $830 million in next year’s budget to retire outstanding bonds, with a portion earmarked for debt that supported Everglade restoration. Those funds supplement the $870 million of already-scheduled debt payments slated for next year, according to Ben Watkins, the state’s director of bond finance.
Less debt means the state can reduce some of its fixed costs, like paying out interest and principal to bondholders each year. That frees up future spending that Florida can either store away or invest in other priorities.
Now lets add in commiefornia's county debit to your figures and see what we get....
