State Credit Card No Way To Close Multi-Billion Dollar Deficit
Each year, the state is called on to pay debt it has created, and this week that call came in the form of a budget resolution. The state has, once again, used a taxpayer-funded credit card to rack up millions in additional spending leaving New Yorkers to foot the bill. I voted against the measure because it creates new debt in a fiscally unstable economy and does little to pay back the state’s current debt.
While there is something to be said for making payments on time, it is the idea that we continue to borrow money to fund new projects that I cannot support. This fiscal year alone, we are looking at a debt increase of $604.7 million over last year. Outstanding state debt from the last fiscal year stands at a staggering $56.4 billion and is projected to be $58.2 billion this year, or a three percent increase. State finances are out of control and the Legislature’s band aid “quick fix” budget gimmicks only serve to make matters worse.
This year alone, state government is looking to make an $8.9 billion payment, which includes $6.6 billion in state-related debt service, $1.5 billion for market fluctuation in variable-rate debt and interest rate exchange, and $250 million for the Debt Reduction Reserve Fund. State Guaranteed Debt, authorized by voters, pays for authorities, including the New York State Thruway Authority, the Job Development Authority, and the Port Authority of New York and New Jersey.
While some debt is approved by voters, “back-door borrowing” is a practice engaged in by public authorities. The state has authorized numerous public authorities to issue debt, for which the state is contractually obligated to pay the interest and return of principal. This debt is not approved by voters but tax dollars are used to repay it. This type of borrowing makes up 94 percent of the outstanding State-Funded debt, $53.19 billion. The total outstanding debt, including authority debt, is a staggering $151.8 billion. According to State Comptroller DiNapoli’s Debt Impact Study from March 2010, State-Funded debt has increased by 43 percent or $1.8 billion since 2000.
It is unconscionable to think that the state would continue to build debt without voter approval and expect them to pay. There is little hope to produce a financially solvent New York if we fail to address growing debt through “back-door borrowing.” The state is bypassing the taxpayers and sending them the bill. All state-approved debt needs to be approved by taxpayers so we, as the people, have the final say on where our dollars are spent. With property taxes escalating at an ever-increasing rate, and the cost of living rising, it is imperative that the state government become more financially responsible and responsive to the people footing the bill.
It is due to this “back-door” debt that I stand firm in my resolve to make Albany more accountable to taxpayers. It is a continued struggle, but I will continue to be responsible to you the people who elected me to this position. If you wish to contact me about this or any other state matter, please call me at my district office at (631) 724-2929.