Bulletin #9: June 1, 1999
We're still paying for big-spending budgets of years ago
New York can't afford another big spending increase. The need to cut our high taxes further and to pay for those tax cuts already enacted is one reason, as previous editions of Spending Watch have pointed out. Here's another reason: we must get serious about paying down New York's enormously high debt.
How bad is it? Compare New York to other states. Our combined state and local debt totaled $8,232 per resident in 1996; that was 87 percent above the average for all states. States such as Michigan, Ohio and Virginia have less than half the debt burden shouldered by taxpayers in the Empire State.
And, for most of a decade now, things have grown worse. From 1990 to 1998, state-supported debt more than doubled, rising from $26 billion to $57 billion, according to the Office of the State Comptroller. The majority of the new debt was "back-door" borrowing. And much of it was incurred not for capital investments, but simply to pay for ongoing spending.
More debt means less money for tax cuts, other needs
This year, the state will spend nearly $4 billion on debt service. That's an historic high - up from $2.6 billion in 1994, and just $1.9 billion in 1992.
In other words, all the borrowing Albany has done in recent years is not only a huge burden waiting for our children - it's already interfering with our ability to do the things we want and need. For instance, if our debt service were only the level it was five years ago, the difference would be enough to cover most of the additional cost of the STAR program. Or, we could use those dollars to provide more of the tax cuts our economy needs.
All of us agree on controlling debt. What about spending?
Good proposals for limiting new debt have been made by Governor Pataki and all the legislative leaders. Perhaps the most ambitious plan is that proposed by Assembly Republican Leader Faso. His proposals include a multi-year plan to cut debt levels sharply, capping debt service at 5.75 percent of state-fund revenues, and restricting long-term debt to capital purposes only.
Ultimately, the solution to our debt problem is simple: Spend less. This year's budget is a good place to start.