ORLANDO, Fla. - In an election year, a state's debt burden can take on political significance for candidates that often outweighs its credit implication for the market.

So how much debt is really too much debt?

It depends, Claire G. Cohen, executive managing director at Fitch Investors Service, told a conference of state treasurers and investment bankers yesterday.

Speaking at the 17th annual conference of the National Association of State Treasurers, Ms. Cohen outlined several indicators of debt load, and how they can be used to evaluate whether a credit is bogged down by too much outstanding debt.

"Now that we've come through a very prosperous period for governments and are now in a very unprosperous period, it's tempting to use debt for the wrong reasons," Ms. Cohen said. "But the question of how much debt is too much debt has no precise answer.

"You might think that whoever has the least debt is going to produce the higher-rated security," she said. "But there are a couple of catches to that."

First, there are too many other variables, including economic performance, legal restrictions, and differing attitudes toward the role of government, she said.

But there are guidelines, as long as the analyst understands the guidelines should be applied differently to different credits, she noted.

One is the ratto of debt to personal income. This definition of debt includes all types of obligations that the government is required to pay, including general obligation bonds, leases, and certificates of participation, she said.

Averages for the category have fluctuated in a very narrow band between 2% and 4% for most credits over the past 20 years, Ms. Cohen said. But during weak economic periods, like the mid-1970s, some states, such as Connecticut, Vermont, and Delaware, had debt-to-income ratios near 10%, she noted.

Those rates have since fallen with the expansion of resources and the reduction of debt issuance in most states, she said.

Janet Rzewnicki, Delaware's treasurer, agreed that her state has historically had an extremely high debt load, which contributed to one of the lowest credit ratings in the nation during the 1970s.

But, she said, in the late 1970s a program was put into effect to pare issuance. Under that program, Delaware permitted itself an annual new issue rate equal to just 75% of the amount of debt retired each year.

As the debt burden shrank and Delaware's credit strength improved, the state eased the restriction to allow for a somewhat slower pace of debt retirement, she said.

According to the Delaware treasurer's office, the state's debt per capita in 1980 was $911. That figure has fallen to $728 in 1992.

A second measure of debt burden Ms. Cohen outlined is the ratio of debt to the estimated full value of property. Ms. Cohen said that ratio traditionally hovers around 1%, but is less valuable than other indicators in determining debt stress.

One of the most useful measures, she said, is debt service compared to, available revenues. For most states, that ratio is about 5% or less.

But Ms. Cohen said it is difficult to use this measure to compare one state to another, because of differences in the way revenues are raised.

Some states, for example, raise revenues that are then funneled to the local level while other states do not. That skews the comparison, she noted.

Per capita debt is another popular indicator, Ms. Cohen observed. "But it is not all that meaningful." she said. "It does indicate, however, what the citizen burden is if the taxable wealth begins to slip."

Whether the indicator is meaningful or not sometimes is irrelevant in a political year.

Mary Ellen Withrow, treasurer of Ohio and the outgoing president of the state treasurers association, said the per capita debt burden became an issue in the 1990 governor's race in her state, even though Ohio ranked near the national median for the indicator.

"I didn't think we were too highly in debt," Ms. Withrow said, but added that explaining issues like debt burden to the electorate is often daunting.

Over the next several years, Ms. Cohen said, debt ratios are likely to rise.

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