Bonds Reduce Cities' Debt in Iowa

Dr. Phuong Nguyen, researcher in the PPC Social Science Program, was quoted in the Iowa City Press-Citizen in an article titled, "Cities' Debt Varies Across County." With interest rates at an all time low, many municipalities have chosen to increase their outstanding debt by issuing bonds to pay for projects.

The Press-Citizen reports that Iowa cities "increased their overall debt by five percent last fiscal year, which ended June 30. The state’s overall outstanding debt obligations, including those for cities, counties, state agencies and school districts, increased by 6.6 percent, to more than $13.8 billion." Dr. Nguyen warns that such bonds should not be considered a revenue source. "At the end of the day, cities have to pay for the cost of the bond," he said.