overlapping debt

Overlapping debt

The portion of debt of political subdivisions or neighboring special districts that a municipality is responsible for.

Overlapping Debt

A situation in which two governments with overlapping jurisdiction each have debt. For example, if the City and the State of New York have both issued bonds to pay for their operations, both the city and the state have overlapping debt. Having overlapping debt may affect one or both governments' ability to repay.

overlapping debt

Debt of a municipality that is shared with another political entity. For example, a city may share responsibility with the county in which the city is located for bonds issued by the county to finance a facility such as a public auditorium. Compare underlying debt.
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The low debt burden, mostly comprised of overlapping debt, indicates that it is unlikely that the tax rate needed to repay district debt would pressure the rating.
Neither reflects the issuer's capacity to generate the required revenues to repay the debt, and they do not necessarily take the perspective of the taxpayer into account in considering the impact of overlapping debt.
"The downgrade to Aa3 largely reflects current and anticipated growth in the village's direct debt burden and likely growth in its overlapping debt burden tied to borrowing in support of the Foxconn development," Moody's said.
Offsetting factors include a large amount of overlapping debt and below average wealth levels.
To meet the objectives of providing debt capacity information, governments should present, at a minimum, four types of information in statistical section schedules--ratios of outstanding debt, direct and overlapping debt, debt limitations, and pledged-revenue coverage.
Likewise, the city's net direct and overlapping debt totals $188.4 million, about $414 per capita - quite a bit lower than Moody's median of $1,284.
The district's combined burden of direct and overlapping debt and Fitch adjusted net pension liability, equates to about 12% of resident personal income.
However, in terms of total indebtedness and operating position--as measured by net direct and overlapping debt per capita, debt service as a percentage of general fund revenue, and debt service as a percentage of operating expenditures--the peer group outperformed the county.
The measure includes about $6.5 billion of direct debt and a Fitch-adjusted unfunded pension liability of about $924 million, assuming a 6% rate of return assumption, as well as $37.5 billion in overlapping debt.
The city's long-term liability burden consists primarily of overlapping debt. The governmental portion of the city's five year capital plan for 2019 to 2023 totals about $95 million (compared to $306 million in GO debt currently outstanding), which the city anticipates funding with tax-supported debt.
Therefore, overlapping debt is considered to determine the overall debt burden to the taxpayers.
Approximately 70% of the net overall debt burden is derived from overlapping debt likely stemming from area wide growth related capital needs.