The tax-supported debt of U.S. states rose to a net $510 billion in 2011 from $497 billion the year before, according to Moody’s Investors Service.
The year-over-year increase of 2.5 percent is down from an annual rate as high as 10 percent in the previous two years, the New York-based company said today in a report.
The 2012 rate will be “comparable or slightly higher than 2011 levels,” according to the statement. States slowed borrowing despite low interest rates because of legal limits and antidebt sentiment, Moody’s said.
The report shows the magnitude of the difference in state debt burdens. California has the most, with about $96 billion, according to Moody’s. Meanwhile, Nebraska has the least: $27 million.
On a per-capita basis, Connecticut and Massachusetts have the most debt, followed by New Jersey, Hawaii and New York, according to the report.
The Federal Reserve in March said U.S. state and local governments reduced debts last year for the first time since 1996. Obligations dropped by almost 2 percent, helping shrink the market for U.S. municipal securities to $3.74 trillion at the end of December from $3.8 trillion a year earlier, the figures show.
Debt growth may be “subdued for several years,” according to the Moody’s report.
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