For Release — March 24, 2010
Business Council says Assembly borrowing plan will cost New York taxpayers too much
ALBANY—"The legislature must make the hard choices necessary to put New York State on the road to economic recovery. That means no new taxes, no new borrowing and reduced spending. Unfortunately, the budget plan put forward today by the Assembly fails to meet that test,” said Kenneth Adams, president and CEO of The Business Council of New York State, Inc.
“While their budget bills claim to enact a modified version of Lt. Gov. Richard Ravitch's long-term budget balancing plan, the Assembly budget promotes the worst part of the Ravitch proposal, the borrowing, and waters down or fails to adopt the most important reforms in the Ravitch plan, including a real independent financial review board and the ability of the Governor to make cuts to balance future budget gaps,” added Adams.
Adams pointed out that Comptroller Thomas DiNapoli has reported that New York already has outstanding debt of $9.8 billion taken to pay operating expenses and temporary budget relief.
“Rather than borrowing more, the legislature should be giving serious consideration to the Comptroller's debt reform plan,” said Adams.
The Assembly accepts the review board structure but puts off any hard choices until the fourth year of the plan after the borrowing.
The $6 billion in new borrowing authorized by the plan will increase state debt service payments by $762 million per year. New York taxpayers will have to lay out $1.62 billion in interest payments to cover the 10-year notes.
“Borrowing money to pay for spending we cannot afford will simply make our fiscal crisis worse when the bills come due,” said Adams.
“New York cannot afford to postpone the tough choices to bring our state spending in line with what our economy can afford,” concluded Adams.