In a new report, Treasurer Bill Lockyer estimates California will devote 7.8 percent of its budget to paying off debt this fiscal year, more than twice the share in 2003-04.
Eight years ago, the state devoted 3.4 percent of its general fund to debt.
The spike in debt costs comes after California voters agreed to borrow more right before the state economy suffered a historic economic downturn, according to Lockyer's report.
Former Gov. Arnold Schwarzenegger and lawmakers championed a $37 billion public works bond package in 2006, near the height of the housing bubble in California when tax dollars flowed mightily into state coffers. Since 2004, voters also have approved borrowing for children's hospitals, stem-cell research and high-speed rail. The state is also paying off bonds that Schwarzenegger and lawmakers used to balance the budget in 2003-04.
State general fund revenues have dropped from $105.3 billion in 2006-07 to an estimated $87.2 billion in 2011-12. Borrowing cost the state $2.5 billion in 2003-04; this year, it will cost $6.8 billion.
Lockyer also attributed the debt service rise to the June 30 expiration of temporary tax hikes and a shift of sales taxes to local governments, both of which will reduce the amount of money available to the state general fund this fiscal year.
The state's debt share will actually rise higher in 2012-13 to 9.2 percent even without any new borrowing, according to Lockyer's report. That's because the state must pay back $1.9 billion next year that it borrowed to balance the budget in 2009.
Note: Borrowing cost figure for 2011-12 has been corrected.