15 Mar 2007
We all know that we sleep better at night when our financial house is in order: our debts are manageable, our bills are being paid in a timely fashion, and we are living within our means. This also rings true as it applies to New York State’s debt and borrowing habits. I’ve often said that State debt is akin to running up credit card bills that your children and grandchildren have to pay. Sooner or later, excessive borrowing and onerously high debt catches up with us all.With this in mind, and as the ranking Democratic member of the Senate Finance Committee, I have introduced legislation that would limit the State’s debt, and put the brakes on New York’s borrowing habits. S.2884 would create a New York State Debt Management Board, which would implement limitations for issuing State related debt and other capital financing matters, while S.2885 would amend the State Constitution to prohibit all backdoor borrowing — money borrowed by the State’s public authorities without public approval.For far too long, New York has been undisciplined when it comes to its debt load, and ineffective when it comes to managing it. Unrestricted borrowing now will cost our grandchildren billions more in generations to come. Just as no citizen or business would borrow money in such a reckless fashion, it is imperative that New York State gets its fiscal house in order as well.The Debt Management Board that would be created under this bill would consist of representatives of the Governor, Comptroller, Budget Director, and the Majority and Minority Leaders of both the Senate and Assembly. The Board would recommend policies to the Governor and the Legislature about issuing debt and other capital financing matters, which would lead to a higher degree of restraint when it comes to the State’s debt burden. While prohibiting backdoor borrowing, my proposed amendment would allow some borrowing by authorities that would be subject to a phased-in cap. In addition, no new debt would be issued UNLESS the total outstanding principal amount of debt authorized and contracted after the amended law takes effect is less than a designated percentage of the total personal income of the State.Debt reform is a key component of the Senate Democrats’ effort to improve the Upstate economy. It is one of the most urgent issues facing New York State. The future of the State’s economy depends on its ability to manage debt in a way that is disciplined and effective. Along with my Democratic colleagues, I have spent the past several years focusing on the reckless spending practices of public authorities and the way our State has run up its debt. If we do not address the issue of excessive and backdoor borrowing, our children and grandchildren will be left with a debt burden that will adversely affect their quality of life, and will directly hinder the economic future of Buffalo and Western New York. I believe this legislation goes a long way in addressing these concerns, and I plan to meet with local business leaders to discuss these significant debt reduction proposals. I’m optimistic that working together, and under the leadership of Governor Spitzer, we can institute real debt reform and put an end to reckless borrowing practices. New York’s future generations are counting on us.
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