WASHINGTON - The total amount of bond authority under the private-activity bond volume cap will inch up in 1993 to $14.599 million, a 1% increase from the 1992 level of $14.473 million, Census Bureau population figures show.
The $126 million increase in the overall volume cap is spread evenly across a wide number of states, with the largest increases in Arizona, Colorado, and Washington. Connecticut is the only state that will see its volume cap drop in 1993.
The volume cap calculations are based on report #CB92-276, which was published yesterday by the Census Bureau and estimates U.S. resident population as of July 1, 1992. The Tax Reform Act of 1986, which created the volume cap, requires states to use that report in computing their 1993 volume caps.
Under, the volume cap law, each state is permitted to allocate an amount of private-activity bond authority equal to $50 per capita or $150 Million, whichever is greater. The cap will remain unchanged in 1993 for the 22 states with populations small enough to keep them at the $150 million level. The District of Columbia is also at the $150 million level.
Of the 28 states that must compute their cap amount using the $50 per capita formula, 27 will see increases in their 1993 allotment. The largest rise is a 2.72% increase in Colorado's cap, to $173.5 million. The two other largest increases are 2.39% in Washington's cap, to $256.9 million, and 2.19% in Arizona's cap, to $191.6 million.
The five other largest increases are: Georgia, up 1.90%, to $337.5 million; Texas, up 1.77%, to $882.9 million; California, up 1.60%, to $1.543 billion; Florida, up 1.58%, to $674.4 million; and North Carolina, up 1.57%, to $342.2 million.
Connecticut's volume cap will drop by 0.36%, to $164 million, in 1993.
The private-activity bond cap has been a source of controversy since it was imposed on states in 1986. Studies by The Bond Buyer have found that while the small states at the $150 million level have relatively few problems living within the cap's confines, states that must compute their cap using the $50 per capita formula generally do not have enough private-activity bond authority to go around.
Recently, President-elect Bill Clinton indicated he would favor easing the cap. On Dec. 15, during his economic summit in Little Rock, Clinton said he agreed with the concerns expressed by a Wall Street investment banker, who complained that too many valid public purposes had to compete with each other for an inadequate supply of private-activity bond authority.
In its population report, the Census Bureau said the U.S. grew in 1992 by 1.2% to 255.1 million people, expanding by slightly more than 2.9 million since July 1991. Nevada was the country's fastest growing state, posting a 3.5% gain.
Nevada's neighbors also experienced large population gains in the last year, the bureau said. Nine of the 10 quickest growing states are in the West and include Alaska, Colorado, Idaho, Washington, and Arizona.