Stapleton Secures Historically Low Interest on Loan for Colorado Schools, July 10, 2014
FOR IMMEDIATE RELEASE
July 10, 2014
Stapleton Secures Historically Low Interest on Loan for Colorado Schools
Rate of 0.109% Will Save Taxpayers’ Money
DENVER – Treasurer Walker Stapleton has successfully secured a historically low interest rate on a 12-month note for $165 million that will be used to support 22 local school districts as they budget for next year.
“The rate of 0.109% we were able to secure shows the State has strong credit, and our ability to maintain that good standing in the market saves taxpayers a lot of money when it comes to paying back that loan,” Stapleton said. “Washington DC could certainly learn a thing or two from Colorado when it comes to fiscal responsibility and maintaining good credit.”
The Education Tax Revenue Anticipation Notes (ETRANS) is a short-term cash flow borrowing program that the Treasurer’s office does for 22 school districts, though it is available to all school districts. The ETRANS note allows districts to start their fiscal year in July along with the rest of the state even though most of the district’s local revenue, which comes from property taxes, isn’t collected until February.
“When districts moved their fiscal year to match up with the state’s 20 years ago it made the budgeting process a lot easier for the state,” Stapleton said, “but from the school district’s perspective it was equivalent to an employer telling you that you're hired except you won't get most of your salary until six months from now, so figure out how to budget between now and then. ”
The 12-month cash flow borrowing program on behalf of school districts allows them to meet their budget requirements, and the Treasurer’s office helps them out by paying the interest in the loan.