FY2011 - FY2015 Capital Investment Plan
Appendix A - Debt Affordability Analysis - Existing Debt Burden

Since the Patrick-Murray Administration instituted rigorous debt affordability policies, the Commonwealth’s rankings in terms of debt burden have been improved by several measures from what the Administration inherited.  Nevertheless, the Commonwealth’s debt burden remains among the highest in the nation by certain measures.  Moody’s Investors Service ranks Massachusetts fourth in total net tax-supported debt, fourth in total gross tax-supported debt (down from third in 2007), second in net tax-supported debt as a percentage of personal income, and second in net tax-supported debt per capita (down from first in 2007).[10] Standard and Poor’s Massachusetts rankings are similar: second in tax-supported debt per capita (down from first in 2007), third in tax-supported debt as a percentage of personal income (down from second in 2007), and fourth in total tax-supported debt.[11]

It is important to note, however, that these measures include certain debt issued by entities other than the Commonwealth for which the Commonwealth is not liable (e.g., $4.45 billion of debt issued by the Massachusetts School Building Authority).  In addition, these measures favor other states that have stronger county governments and other political subdivisions that issue debt to finance capital improvements that are financed by state government in Massachusetts.  In fact, in the most recent U.S. Census Bureau report on the matter, Massachusetts ranked 49th out of the 50 states in terms of local debt as a percent of total debt (local and state debt)[12], indicating that relative to other states, many of the capital needs of the entire state are borne by the Commonwealth itself.  Based on this statistic, it is safe to assume that Massachusetts would likely rank lower when measuring debt as a percentage of personal income or per capita if both state and local debt were taken into account. 

In light of the Commonwealth’s large outstanding debt burden and significant need for capital investment, the Patrick-Murray Administration evaluated the administrative bond cap immediately after taking office in connection with the fiscal year 2008 capital planning process and the publication of the FY2008-2012 Five-Year Capital Investment Plan.  This examination and analysis focused on the affordability of the Commonwealth’s current obligations and its capacity to support additional debt obligations.  This report represents the third annual update of the analysis and the results inform the FY2011-2015 Five-Year Capital Investment Plan.


[10] Moody’s Investors Service, “2010 State Debt Medians Report”, May 2010. 

[11] Standard and Poor’s, “2009 State Debt Review: Significant Challenges Lie Ahead”, December 16, 2009.

[12] U.S. Census Bureau, “State and Local Government Finances by Level of Government and by State: 2007”.