New York Has a Debt Problem
To hear the administration tell it, the last eight years have seen the state finally find firm financial standing after years of reckless spending and mismanagement. In the governorís view, these failings have been familial and bipartisan. (Smart money would bet on the use of a very large graph helping him spin this tale at his State of the State Address on January 3.)
For years, Iíve been warning my constituents and my colleagues on both sides of the aisle that this is not an accurate accounting of state finances. My Assembly minority colleagues and I have been fighting to chart a new, responsible fiscal direction for our state.
For years, Iíve warned against a ballooning state debt that requires billions and billions in expensive service payments annually. Iíve spoken out against the fact that, essentially, the state is operating like a household which only makes minimum interest payments on an escalating credit card tab. Iíve spoken out against runaway, backdoor agency borrowing that allows the administration to bypass a sensible statute that requires voters to approve any new state debt. More recently, Iíve questioned much of the administrationís discretionary spending as the Legislature grapples with a pressing, short-term fiscal challenge: a budget deficit that could top out at $4.1 billion.
Last week, these concerns became bipartisan in high-profile fashion. State Comptroller Tom DiNapoli released a report that echoes what Iíve been saying since I came to the Assembly: New York State has a debt problem, and itís going to get much worse before it gets better unless we take decisive, corrective action.
DiNapoli reports that New York State holds the second-largest public debt in the nation, a dizzying $61.4 billion at the end of the last fiscal year. The amount held by public authorities (and therefore never approved by taxpaying voters) is a staggering $47.2 billion. The governor promises continued fiscal stewardship, but DiNapoliís projections tell a different story. If we stay on this course, he forecasts that our debt will increase to $71.8 billion over the next four years. By then, it would costs taxpayers a whopping $8.2 billion in yearly debt service payments alone.
How do we get back on track?
The first step is obvious- we need to eliminate all backdoor borrowing through our public authorities.
Additionally, our state budget needs reflect the fiscal reality that we are badly in debt and need to make tough choices and tighten our belts. Any family facing a precarious financial situation would have to consider how they could spend less.
For example, successful Hollywood film studios donít need corporate giveaways paid for by middle-class families in the North Country. We shouldnít be spending $400 million to offer them subsidies they donít need.
We should be providing healthcare to poor families who truly need it the most, but we need to take a look at scaling back the Cadillac plans that make our Medicaid program exceptionally costly, burden taxpayers and increase our debt. This session, Iíll be advocating for a six month residency requirement for all Medicaid recipients.
We shouldnít be dumping hundreds of millions of dollars into a self-promotional jobs program that doesnít even have real metrics for tracking job growth but burns over $50 million taxpayer dollars on shameless advertisements.
Finally, we need leaders in Albany to wrap their heads around the notion that raising taxes and piling regulations on small businesses, family farms, seniors and the middle class is no way to generate revenue and balance our budget. The opposite happens. It turns New Yorkers who contribute to our tax base into Floridians who have simply had enough. When we live within our means, when we only spend what we take in, when we lower taxes and improve our business climate, we drive real economic progress and encourage entrepreneurs to invest in our workforce. Thatís when weíll balance our budget, and thatís when weíll start paying down the principal on our public debt. Our children and grandchildren shouldnít by paying for the administrationís mistakes.