Senate File No. 853 is a proposed bill in Minnesota that seeks to manage the state's debt more formally by setting specific limits on how much debt can be incurred. Here’s a simplified breakdown of what the bill involves:

1. Debt Capacity Forecasts: The Commissioner of Minnesota is required to prepare and deliver a debt capacity forecast twice every year, once in February and once in November. These forecasts are to be presented to both the Governor and the state legislature.

2. Contents of the Forecast: The forecast provided by the Commissioner will include:

   • Details on the state’s existing long-term obligations like bonds and other general debts.
   • Data covering actual debt service payments for the past two fiscal years, estimates for the current year, and projections for the next six years.
   • Information on authorized but not yet issued debt, along with future borrowing capacity.

3. Debt Limit: From July 1, 2025, the forecast will include a new debt limit, which is the maximum amount of new debt that can be issued, ensuring that:

   • The total payment due on all outstanding state debt doesn’t exceed three percent of the state’s estimated non-dedicated general fund revenue for comparable periods.
   • The total payment due on specific types of debts (like state appropriation bonds and lease-purchase financing) doesn’t exceed 0.6 percent of the same revenue estimate.

4. Implications of Exceeding Debt Limits:

   • If the forecast shows that these debt limits will be breached with new debt issuance, the Commissioner must delay issuing any new debt authorized after the forecast until a subsequent forecast shows compliance with these limits.
   • There’s no requirement to delay or reduce the amount of already authorized debt, nor to cancel any appropriations made before such a forecast.

The bill intends to ensure fiscal prudence by limiting the state’s ability to accumulate debt beyond specified percentages of its projected general fund revenue, thereby maintaining a balanced approach to fiscal management and spending.