(The Center Square) – Georgia has sold more than $1 billion in general obligation bonds that will result in savings for taxpayers, Gov. Brian Kemp said.
The state will purchase and retire outstanding bonds to achieve debt service savings with the sale. It also will fund new construction projects, repairs, renovations and equipment purchases.
The Georgia State Financing and Investment Commission approved the bond sale at its meeting Wednesday.
"This bond sale allows us to build and update various infrastructure projects and create good-paying jobs for hardworking Georgians across the state," Kemp said. "Due to low interest rates here in the Peach State, we will be saving taxpayers dollars for years to come while also ensuring Georgia continues to lead the nation in economic recovery."
Georgia's AAA rating will enable the state to sell its bonds with the lowest possible interest rate, saving state taxpayers money. Only nine states have the rating, which is the highest states can receive. Borrowing money through general obligation bonds allows the state to spread the costs across multiple years instead of tapping into cash flow or current revenue to cover a project's expenses.
The interest on all the bonds is exempt from state income tax for Georgia residents and a large portion of the bonds also are exempt from federal income taxes.
The overall true interest rate cost for the bonds was 1.7420%, which was the second-lowest ever for an issue of Georgia's general obligation bonds. The commission sold them through four different bids. Two of the bids were for the 2021A bonds, which are exempt from federal income taxes. Two of the bids were for the 2021B bonds, which are subject to federal income taxes.
"We are extremely pleased with the bids we received," said Diana Pope, director of the commission's financing and investment division. "These were the result of the state's strong credit position and prudent financial management, all of which was reflected in the pre-sale interest, the variety and type of accounts participating, and the post-sale follow-through."
Most of the funding from the $1.097 billion sale will support the state's schools. The sale provides $304.7 million for K-12 districts and state school projects. More than $250.9 million will fund University System of Georgia projects. The Department of Technical and Adult Education also will receive $113 million for new and renovated facilities.
The state will use almost $156 million for public safety facilities and equipment. More than $112 million was set aside for roads, bridges and rail projects. The Savannah-Georgia Convention Center Authority will receive $90 million for its expansion project in Savannah. It also will support public libraries and public health improvements.