Senate Majority Leader Joseph Bruno has proposed a debt-reform plan that would cut the state's projected debt by $6 billion over five years and reform its borrowing practices.
The Senate plan would eliminate "back-door borrowing"--that is, borrowing not expressly approved by voters. A constitutional amendment would set a debt cap to limit the state's ability to do back-door borrowing. This cap would be supplanted by a total ban on back-door borrowing in 2004.
Until the full ban takes effect, state-supported debt would be capped at a percentage of state residents' personal income.
The Senate plan also would:
- Allow the state to incur debt only for capital purposes.
- Permit more than one general obligation bond issue to be placed on an election ballot.
- Allocate 25 percent of tobacco-settlement funds for debt reduction.
Debt-reform plans have also been released by Governor Pataki, the Assembly Democratic majority and Assembly Republicans.
Assembly Democrats' debt-reform plan is based on less borrowing and more pay-as-you-go spending in times of healthy state revenues. Specific provisions include: putting $261 million in currently available funds into the debt reduction reserve fund and using some of that fund to pay $511 million in cash for the Dedicated Highway Program.
The Governor's plan would cut the state's projected debt by $4.7 billion and reduce future debt issuances by 50 percent by replacing bond financing with more pay-as-you-go capital spending.
Assembly Republicans's proposal includes: a multi-year plan to reduce scheduled debt levels by more than $5 billion over the next four years, including a statutory set-aside of funds to pay down a set percentage of outstanding debt service every year; and a cap on debt service at 5.75 percent of total state fund revenues.