DE HB195

Replaces the fixed 5% borrowing limit for state tax-supported obligations with a graduated schedule based on Delaware Municipal Bond interest rates announced on March 31 of the prior fiscal year.

Graduated borrowing limits range from 9.5% of General Fund revenue (when interest rates are below 2.5%) down to 5.0% (when rates exceed 6.5%), with intermediate percentages scaling with interest rate bands.

Reduces the maximum annual debt service payment ceiling from 15% to 12.5% of estimated General Fund and Transportation Trust Fund revenue for the following fiscal year.

Modernizes state bonding calculations to align borrowing authority with prevailing interest rate conditions rather than using a static percentage threshold.