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US State Debt Levels Rose in 2021 at Fastest Pace in Five Years

  • State tax-supported debt increased 4% last year, S&P says
  • Uptick in debt levels likely a fleeting ‘blip’ as market turns

US state debt loads jumped last year as historically low interest rates and a bounty of investor demand led to record sales in the $4 trillion municipal bond market. 

State tax-supported debt increased 4% in fiscal year 2021, the fastest in five years and a departure from recent years’ declining trends as the market favored issuers with low borrowing costs for much of the year, according to an analysis published on Wednesday by S&P Global Ratings