Bonds and Debt

The Treasury’s Bond Division is responsible for the management of debt issued by the State Bond Commission. General Obligation debt consists of (1) Net Direct General Obligation Bonds and (2) Self-Supporting Bonds with specific revenue pledged.

More specifically, we ensure the timely payment of all principal and interest for the State’s outstanding debt portfolio. In order to facilitate these payments, cash flow must be effectively managed from General Fund Appropriations and Special Fund Transfers. As a member of the State Bond Commission’s Working Group, we help oversee and manage the process of bond issuance. Bond documents are reviewed and the State’s credit rating is also secured during the pre-issuance of debt phase. Once complete, proceeds from the bond sale are transferred to the appropriate state agencies.

We also monitor the investment earnings on the gross proceeds of all federally tax-exempt bonds issued by the State. U.S. Treasury regulations limit the yield at which proceeds on the bond issues can be invested. These excess earnings are realized when bonds are sold at tax-exempt interest rates and the proceeds are then invested in securities that earn higher taxable yields. Calculations are performed on these excess earrings and reported to the IRS regularly.