Borrowing eats up smaller share of California budget

SACRAMENTO -- The cost of financing California government with bonds is expected to consume 7.7% of the state’s general fund tax revenue over the next year, according to a new report from the state Treasurer Bill Lockyer.

The total bill is pegged at $7.5 billion for principal and interest. That’s a reduction from last year, when it totaled $8.6 billion and was 8.8% of revenue.

Most of the state’s debt load of $92.5 billion come from bonds approved by voters to fund schools, universities, levees and other infrastructure projects.

There’s also more than $5 billion in bonds left over from former Gov. Arnold Schwarzenegger’s effort to patch the state’s budget deficit with more borrowing in 2004.

Those bonds are counted toward the roughly $27 billion “wall of debt” identified by Gov. Jerry Brown, which includes a wide array of borrowing used to scrape by during California’s budget crisis.

Brown has emphasized his plan to whittle down the debt over the next few years, but the state’s obligations extend far beyond that measurement.

In particular, the state auditor has identified teacher pensions and healthcare benefits for retirees as two threats to California’s finances.

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Twitter: @chrismegerian