DECEMBER 1998Comptroller McCall: New York must take drastic steps to kick its debt habit
State Comptroller H. Carl McCall has urged lawmakers to pass constitutional amendments and enact new laws to curb what he calls New York's insatiable appetite for debt.
"New York's borrowing practices continue to move us in exactly the wrong direction," McCall said in a press release announcing his debt reform proposal.
The Comptroller's proposals would:
- Ban "backdoor' borrowing.
- Limit new debt to a percentage of the state's personal income.
- Limit debt service to a measure of the state's revenues.
- Require the Governor to hold public hearings on the capital plan.
- Eliminate the existing prohibition against multiple ballot measures.
Comptroller McCall's debt reform provided a "snapshot" of New York's debt that included these details:
- New York State's credit rating is lower than every state's except Louisiana. This low rating costs the state an estimated $10 million per year in additional interest costs, Comptroller McCall said.
- New York's debt burden is among the highest in the nation. The state carries $1,913 in debt per person, which the Comptroller's report said is more than double the national average and fourth highest among the states in tax-supported debt per person. Only Connecticut, Hawaii, and Massachusetts have higher debt burdens.
- Debt service-the cost of paying principal and interest-is growing faster than overall spending. "In 1990, debt service accounted for 3.7 percent of total receipts; this year it is 4.8 percent and will grow to almost 5.9 percent in 2002," the Comptroller said.
"New York continues to be the poster child for poor planning-borrowing more in good times instead of paying off debts, borrowing for things that could be purchased with cash, and squandering an opportunity to put our fiscal house in order," he said.
"New Yorkers recognize that debt is a time-bomb threatening this state's future," McCall said.
December 10, 1998