California sees decrease in bond debt since 2025

The last year since 2017 that exceeded California’s 2025 levels of bond debt was 2021, which saw $103.62 billion of new bond debt issued, according to the commission.

Despite the lower levels of bond debt issued just this year, Wayne Winegarden, senior business fellow and economist at Pasadena-based Pacific Research Institute, said he doesn’t see the state’s total indebtedness improving.

“I’m not sure how much we’re actually changing, especially with all of the fund shifts and everything the governor has proposed,” Winegarden told The Center Square.

Winegarden added he hopes state lawmakers look at paying down the unemployment insurance debt, as well as addressing pension liabilities.

“Especially the vulnerability of that outstanding debt relative to the A.I. boom,” Winegarden said. “That’s not sustainable. Right now, the pension debt could be looking much bigger, simply because the terms are inflated and there is an A.I. bubble.”

California needs to exercise some discipline after a spending spree, Winegarden told The Center Square.

“It’s the equivalent of using your credit card to pay your utilities,” the economist added. “That risk is out there, so long as our spending levels continue to outpace our economy. The best thing the Legislature could do in terms of showing they’re serious on the debt is to show they’re serious on the spending.”

Additional data from the commission shows California's monthly debt issuance skyrocketed to just over $100 billion by the end of 2025. By June 2025, it was already $49.82 billion – roughly $17.25 billion more than this month's debt.

About $16.3 billion of that debt was issued by local governments for city and county projects, the commission’s latest report shows. Roughly $22.1 billion is long-term debt, according to the report.

The state's bond debt is intended to pay for roads, infrastructure and other projects. But Winegarden said California taxpayers aren't getting their money's worth.

“Look at the quality of the services we’re getting,” Winegarden said. “So much of our infrastructure is lacking roads, highways, bridges - the kinds of things we need to put our debt borrowing capacity to provide the services Californians expect.”

The Center Square previously reported that the state’s bond debt exceeded $99 billion, largely from state and local bonds. And the California Treasurer’s Office previously announced efforts to save the state’s residents money by selling the bond debt, effectively refinancing bonds taken out to pay for essential services like K-12 schools, coastal protection services and safe drinking water.

California state lawmakers did not respond to The Center Square's request for comment on Friday. Officials with the California Debt & Investment Advisory Commission also did not respond.