As discussed earlier, there are a number of state-sponsored, autonomous entities that are financed without the direct support of the state government and they have a lot of debt.
Indeed, the total long-term debt of these entities at the end of fiscal year 2016 was $2.6 billion, almost four times greater than the state’s direct indebtedness.
The chart below shows where this debt is sitting and how it’s supported.
Debt of State Sponsored Entities: Fiscal-Year 2016
|Entity||Long Term Debt ($ millions)||Credit Support|
|Vermont Student Assistance Corporation||869||Portfolio of Student Loans|
|University of Vermont||565||Tuition|
|Vermont State Colleges||117||Tuition|
|Vermont Housing Finance Authority||430||Portfolio of Housing Loans|
|All Other Entities||589||Mostly Loan Portfolios|
Source: 2016 Comprehensive Financial Report
It should also be noted that UVM and the Vermont State Colleges have a further $261.9 million liability for retiree health benefits.
While the state government has no iron clad obligation to support all this “off-balance sheet” debt, markets probably perceive a moral obligation in the event the financial health of any of these entities headed south. Hopefully, this will never need to be tested.