7 RI Cities andTowns Have Liabilities in the “Danger Zone” — Magaziner Talks New Debt Report

7 RI Cities andTowns Have Liabilities in the “Danger Zone” — Magaziner Talks New Debt Report

Rhode Island General Treasurer Seth Magaziner joined GoLocal News Editor Kate Nagle on GoLocal LIVE, where he spoke to the recent release of the 2019 Rhode Island Debt Affordability Study — as well the recently signed-into-law Student Loan Bill of Rights, and gave an updated on the status of the spending of the school construction bond approved by voters last November. 

“The [debt] study provides comprehensive information on the debt, pension and post-employment liabilities of the state, municipalities and quasi-public agencies of Rhode Island,” said Magaziner. “We need to make sure that we know what the appropriate limits are so that we don’t overextend ourselves and borrow too much - that’s why we released the debt affordability report last week. What we basically found was that the borrowing for the state — and most of the cities and towns — is well within acceptable levels, so we can afford to have some bonds on the ballot statewide again in the next year’s election.”

Most of the cities and towns are well below what we consider to be in the danger zone when it comes to borrowing, so they have capacity. We did find seven cities and towns that have liabilities higher that what we recommend as the ideal levels.  In most cases though with those cities and towns that were above the recommended limits, it actually wasn’t traditional bonded debt that was the problem — it was pension liabilities. 

A full copy of the report can be found here.