Savings Over Next Four Years Eclipses Goal Set In Governor Pence’s Transportation Plan
Indianapolis – Governor Mike Pence today announced that the Indiana Finance Authority (IFA) has refinanced transportation bonds issued in 2007 to a lower interest rate, saving taxpayers more than $147 million in debt service.
“Today marks an important step in ensuring that we are using Hoosier tax dollars as prudently and as efficiently as possible,†said Governor Mike Pence. “By refinancing these transportation bonds with a lower interest rate, we are proving once again the importance of managing the state’s public debt in a fiscally responsible way. I’m thankful to the Indiana Finance Authority for its quick action and diligent stewardship of state funds, ultimately saving taxpayers $147 million and allowing more funding to go to our state’s infrastructure.
Dan Huge, director of the Indiana Finance Authority, elaborated on how the transaction works for taxpayers.
“Refunding bonds is similar to refinancing your house, in that IFA replaced the existing bond debt with new debt that has significantly lower interest cost,†Huge said. “That gives the state significant interest savings over time.â€
In keeping with Indiana’s fiscal discipline, Huge explained, the IFA did not extend the term of the new bonds, which will expire at the same time as the previous bonds issued in 2007.
The IFA closed on the bond refinancing this morning in the amount of $464,975,000. Locking in this lower interest rate will achieve approximately 25 percent savings over time and deliver significantly more money for Governor Mike Pence’s transportation plan over the next four years.
“The governor’s transportation plan anticipated $6.5 million worth of savings per year over the next four fiscal years, or $26 million in total,†said Mark Pascarella, IFA director of debt. “With today’s closing, Hoosier taxpayers can anticipate approximately $30.8 million in aggregate for those four fiscal years, significantly eclipsing original estimates.â€
