DiNapoli warns of rising state-funded debt levels
Dec 14, 2017
The amount New Yorkers owe on state-funded debt issued by Albany now stands at three times the median level for all states across the nation, state Comptroller Thomas DiNapoli said Thursday in his latest warning about borrowing levels.
The Democratic comptroller said that while outstanding debt has fallen slightly in recent years, that trend is now about to reverse itself and rise at annual average of 1.3 percent. He said the debt level will rise from $63.7 billion this year to $71.8 billion four years from today.
“New York faces tremendous infrastructure challenges and the wise use of debt can be an essential part of the financing picture,” DiNapoli said. “Still, backdoor borrowing imposes significant costs on taxpayers, lacks transparency and may limit flexibility in providing important services and programs.”
DiNapoli said the state needs to better plan its infrastructure expenses, which directly affects the debt levels, and to put an end to back-door borrowing that pushes through new debt without voter approval.
More than 40 percent of the outstanding state-debt is for education-related purposes, followed by transportation. Moreover, the amount of money coming out of the state budget to pay for previous borrowings is expected to hit $8.2 billion in the 2021 budget – with a 2.8 percent average annual growth between now and 2021.
The comptroller’s findings were rejected by the Cuomo administration. They argued that DiNapoli used in his report debt that should not be considered “state-funded,’’ which officials said artificially inflated the debt level by more than $10 billion. The administration says its different debt calculations come from audited financial statements produced by DiNapoli’s own office, and certified by outside accountants.
“The fact is, New York’s debt has declined for five consecutive years for the first time in history and our debt to personal income ratio is at the lowest level since the 1960s,’’ said Morris Peters, a spokesman for Cuomo’s budget office.
New York’s per capita debt is $3,116. Only 4 percent of outstanding debt was directly approved by voters, the comptroller reported.
New York’s total state-funded debt is topped only by California. But that state’s population is nearly twice that of New York’s, and its per capita debt level is about $900 less than New York.