WASHINGTON -- The amount of private-activity bonds that can be issued under the volume cap will rise slightly to $14.827 billion in 1995, a 0.7% increase from the 1994 level of $14.722 billion, Census Bureau population figures released yesterday show.
In dollar terms, the $105.2 million increase in the 1995 volume cap is less than the $122.6 million rise for the previous year. Following the pattern of the past several years, the increase was spread evenly across a wide number of states. The largest gains came in Arizona, Colorado, Florida, and Texas.
For the third year in a row Connecticut's volume cap will drop slightly. In 1993 and 1994 Connecticut had been the only state to experience a decrease, but for the first time it will be joined this year by New York.
The volume cap calculations are based on Report #CB94-204, which was published yesterday by the Census Bureau and estimates U.S. resident population as of July 1, 1994. The Tax Reform Act of 1986, which created the volume cap, requires states to use the report in computing their 1994 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 caps of the 21 states that had populations small enough to keep them at the $150 million level in 1994 will remain unchanged in 1995. The District of Columbia is also at the $150 million level.
Among the 29 states that must compute their cap using the $50 per capita formula, 26 will see increases in their 1995 allotment. The largest rise is a 3.5% increase in Arizona's cap, to $203.8 million, followed by Colorado, with a 2.5% rise to $182.8 million. In 1994, the order was reversed, with Colorado first and Arizona second.
The other two largest increases in 1995 are a 2.0% rise in Florida's cap, to $697.7 million, and a 1.9% hike in Texas' cap, to $918.9 million. Next is North Carolina, with a 1.8% increase to $353.5 million, and Oregon, with a 1.8% rise to $154.3 million.
For the second year in a row the largest dollar increase is in Texas, where the volume cap will rise by $17.3 million in 1995. Next is Florida, with a $13.7 million increase. Third is California, with an $11 million increase to $1.571 billion.
New York's cap will drop to $908.5 million in 1995, a decrease of $1.4 million, or 0.2% from 1994. Connecticut's cap in 1995 will be $163.8 million, a decrease of $0.1 million, or 0.06%.
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.
In its population report, the Census Bureau said the United States population grew in 1994 by 1.0% to 260.3 million, with about one-third of the increase coming from a rise in the immigrant population.
For the second year in a row Nevada was the country's fastest growing state, posting a 5.4% gain in population. But the state's population of 1.45 million kept its cap at $150 million.
[TABULAR DATA OMITTED]