Public Debt On TSE: Lining Up Lenders for Landing
The federal government may be partially shut down and flirting with an unprecedented debt default but the Broward County Aviation Department had no trouble borrowing $450 million this month.
The agency issued its second of three rounds of bonds backed by revenue generated at the Ft. Lauderdale-Hollywood International Airport.
The money is to expand the airport by adding a second runway, improving its international terminal, building a new concourse and modernizing its luggage handling system.
More than half of the $2.3 billion price tag will be paid for with borrowed money. The airport has sold municipal bonds backed by the business generated at the airport. Broward County Chief Financial Officer Doug Wolfe said that means Broward County taxpayers are not directly paying for the loans.
Instead, it will be every flier who begins or ends a flight at the airport who will pick up the tab. Wolfe admits that means plenty of South Floridians will pay the lenders back through the airfares airlines charge for tickets, passing along their costs of doing business at the airport.
Part of the cost of that cup of coffee or magazine we buy at the airport while waiting for a flight also will go toward the loans as the airport looks for ways to increase the money it collects from concessions.
The airport's strategy of borrowing money is part of the multi-trillion dollar public debt market. These are IOU's issued by public agencies and governments.
On this week's Sunshine Economy, we looked at the state of public debt in South Florida, including this month's bond sale by the airport to continue its expansion project.
The Sunshine Economy series is sponsored by Kaufman Rossin and Company, one of Florida's largest independent accounting firms.