States rush to borrow at low interest rate

WASHINGTON, Sept. 28 (UPI) -- Low interest rates have prompted U.S. state and local governments to increase their borrowing, Federal Reserve records show.

In the most recent figures available, the Fed said borrowing by local and state governments was up 8.3 percent in the second quarter, U.S.A. Today reported Monday.

In the midst of a fiscal crisis, California was able to secure an $8.8 billion loan last week, with the portion due June 30 carrying interest rates of 1.25 percent to 1.5 percent, the newspaper said.

Ohio took advantage of low interest rates to more than double its plan to borrow $252 million. Instead, it borrowed $544, taking on new debt, but refinancing some of its older debt at the same time.

In Florida, Chief Financial Officer of Miami-Dade schools said, "we'll make a little money on our debt."

The school district borrowed funds carrying a 0.37 percent interest rate, but will invest the money where it can make 0.8 percent until it is spent, the newspaper said.

"It's a good time to go out and borrow money," Utah Treasurer Richard Ellis said.

The state recently borrowed $1 billion for highway projects.