DEBT SERVICE
|
Adjusted |
Executive |
Legislative |
Change |
|
DEBT SERVICE |
||||
|
General Fund |
242,650,000 |
250,250,000 |
250,250,000 |
0 |
|
Fiduciary |
12,000,000 |
25,000,000 |
25,000,000 |
0 |
|
Debt Service Fund |
3,577,410,000 |
3,871,500,000 |
3,871,500,000 |
0 |
|
Internal Service Fund |
104,620,000 |
210,000,000 |
210,000,000 |
0 |
|
Capital Projects Fund |
282,500,000 |
365,000,000 |
365,000,000 |
0 |
|
Total for DEBT SERVICE: |
4,219,180,000 |
4,721,750,000 |
4,721,750,000 |
0 |
|
General Fund |
||||
|
State Purposes Account |
||||
|
Payments of Rebates to Federal Government |
5,000,000 | 10,000,000 | 10,000,000 | 0 |
|
Interest on Short Term Notes and Bond Anticipation Notes |
12,650,000 | 15,250,000 | 15,250,000 | 0 |
|
Redemption of Serial Bonds |
225,000,000 |
225,000,000 |
225,000,000 |
0 |
|
Fiduciary |
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|
School Capital Facilities Financing Reserve Fund |
||||
|
Principal and Interest on Serial Bonds |
12,000,000 | 25,000,000 | 25,000,000 | 0 |
|
Debt Service Fund |
||||
|
Mental Health Services Fund |
||||
|
Lease Purchase Payments |
305,570,000 |
345,000,000 |
345,000,000 |
0 |
|
General Debt Service Fund |
||||
|
Principal and Interest on Serial Bonds |
750,850,000 | 741,500,000 | 741,500,000 | 0 |
|
Special Contractual |
1,822,240,000 |
2,085,000,000 |
2,085,000,000 |
0 |
|
Housing Debt Fund |
||||
|
Principal and Interest on Serial Bonds |
34,500,000 | 36,000,000 | 36,000,000 | 0 |
|
Health Income Fund |
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|
Principal and Other Interest on Serial Bonds |
18,000,000 | 36,250,000 | 36,250,000 | 0 |
|
Principal and Interest on Serial Bonds |
1,500,000 | 1,750,000 | 1,750,000 | 0 |
|
Emergency Highway Reconditioning and Preservation Fund |
||||
|
Cooperative Highway |
||||
|
Contractual Agreements |
32,000,000 |
32,000,000 |
32,000,000 |
0 |
|
State University Dormitory Income Fund |
||||
|
Lease Purchase Payments |
45,000,000 |
45,000,000 |
45,000,000 |
0 |
|
Emergency Highway Construction and Reconstruction Fund |
||||
|
Cooperative Highway |
||||
|
Contractual Agreements |
32,000,000 |
32,000,000 |
32,000,000 |
0 |
|
Local Government Assistance Tax Fund |
||||
|
Principal and Interest on Serial Bonds |
535,750,000 | 517,000,000 | 517,000,000 | 0 |
|
Internal Service Fund |
||||
|
Centralized Services Fund |
||||
|
Executive Direction |
104,620,000 |
210,000,000 |
210,000,000 |
0 |
|
Capital Projects Fund |
||||
|
Dedicated Highway and Bridge Trust Fund |
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|
Principal and Interest on Serial Bonds |
282,500,000 | 365,000,000 | 365,000,000 | 0 |
Year-To-Year Change
The Executive proposes to increase All Funds appropriations for State debt service by $502,570,000 over those enacted for the SFY 1998-99. Just under half of the proposed increase is attributed to new debt service on the State’s Special Contractual Obligation bonds issued by public authorities on behalf of New York State. The remaining increase can be attributed to higher projected debt service requirements for Dedicated Highway and Bridge Trust Fund bonds, Dormitory Authority bonds issued for capital projects at mental health facilities, general obligation bonds, certificates of participation issued by the Office of General Services on behalf of various state agencies, and Dormitory Authority bonds issued for State University of New York capital projects.
Legislative Changes
|
Refunding of various bonds |
($20,000,000) |
DS/DBT |
The Assembly anticipates $20 million in total General Fund debt service savings associated with the refunding of various high interest rates New York State bonds currently outstanding. Interest rates remain near their historic low points and are forecast to remain relatively stable throughout the State fiscal year.
|
Re-estimate of Special Contractual Obligation bonds |
($23,500,800) |
DS/DBT |
The State’s public authorities are scheduled to issue a number of special contractual obligation bonds on behalf of the State, each having a debt service impact during SFY 1999-2000. The Assembly’s cash savings of over $23 million is comprised of adjustments for actual sales which occurred during the month of February; re-estimates of bonds sales scheduled for March and later in the fiscal year based on current bond yields, adjusted to account for historical trends; and the re-scheduling of bond sales, which will have the effect of reducing the debt service impact during SFY 1999-2000.
|
Reduction in COPs sale and partial delay of COPs sale |
($36,843,700) |
DS/INT |
The Executive proposes two new Certificate of Participation (COPs) issuances, each having a debt service impact during SFY 1999-2000. The first sale of $228,000,000 is scheduled for July 1999 and has a debt service impact of $79.8 million. The second sale of $138,375,000 is scheduled for November 1999 and has a debt service impact of over $12.4 million. The Assembly reduces the July 1999 sale by $28 million as part of its debt reform proposal, and estimates that a portion these COPs will be issued later in the fiscal year, resulting in approximately $36.8 million in savings in SFY 1999-2000.
|
Re-estimate of Dedicated Highway Bonds |
($49,381,400) |
DS/CAP |
The Thruway Authority is scheduled to issue Dedicated Highway and Bridge Trust Fund bonds in March and June, each having a debt service impact during SFY 1999-2000. The Assembly’s cash savings of $49.3 million is comprised of a re-estimate of the debt service associated with the March sale, based on current bond yields adjusted to account for historical trends, and an adjustment to reflect the Assembly debt reform proposal to use cash to pay the $511 million bond issuance scheduled for June 1999.
|
Re-estimate of Mental Health Facility Improvement bonds |
($2,291,800) |
DS/DBT |
The Dormitory Authority is scheduled to issue Mental Health Facilities Improvement bonds in February and August, each having a debt service impact during SFY 1999-2000. The Assembly’s cash savings of $2.2 million are the result of re-estimates based on current bond market conditions.
|
Re-estimate of Local Government Assistance Corporation bonds |
($9,598,400) |
DS/DBT |
The Local Government Assistance Corporation (LGAC) has approximately $996.5 million in variable rate bonds outstanding. The Assembly’s cash savings of over $9.5 million is comprised of a re-estimate of interest rate cost based on current market, adjusted to account for the historical trend of LGAC’s variable interest rates.
|
Re-estimate of General Obligation bonds |
($3,447,200) |
DS/DBT |
New York State is scheduled to issue General Obligation bonds in March and June, each having a debt service impact during SFY 1999-2000. The Assembly’s cash savings of $3.4 million is comprised of a re-estimate of the debt service associated with the March sale based on current bond yields, adjusted to account for historical trends; and re-estimate of outstanding variable rate debt.
|
Re-estimate of the State’s Commercial Paper Program |
($717,500) |
DS/GEN |
The Comptroller issues short term commercial paper for various cash flow reasons throughout the fiscal year. The Assembly’s cash savings of ($717,500) is comprised of a re-estimate of interest rate costs based on the current market, adjusted to account for historical trends of New York State’s commercial paper rate.
|
Increased Issuance of Short Term Variable Rate Bonds |
($15,556,600) |
DS/DBT |
The Governor proposes to increase the State portfolio of variable rate debt from 5.3 percent to 6.0 percent and includes language authorizing the increase of such debt to 20 percent of the State’s debt portfolio. The Assembly further increases the short-term variable debt portion of the portfolio for savings of $15.6 million in SFY 1999-2000.
1999-2000 Debt Reduction/Reform Proposal
The Assembly proposes a comprehensive debt reduction and reform plan that stresses pay-as-you-go practices and debt reduction.
The main components of the Assembly Debt Reduction Plan are as follows:
1. Use funds in the Debt Reduction Reserve Fund to pay $511 million cash for the Dedicated Highway Program, instead of using Thruway Authority bonds.
2. Prohibit the Governor’s use of borrowing to pay salaries and other operating expenses. In 1999-2000 the Governor borrows $28 million over four years to pay for one-year Y2K consultant fees. Under the Assembly plan, the General Fund pays these costs.
3. Reduce outstanding state-supported debt by redeeming $200 million in higher interest Local Government Assistance Corporation Bonds.
The main components of the Assembly Debt Reform Plan include the following:
1. Pay-As-You-Go Requirements. The State Finance Law is amended to require that the share of pay-as-you-go financing for capital projects be greater than in the previous fiscal year during strong economic times. Economic benchmarks are established to define when such requirements must be met.
In order to avoid over-reliance on debt during economic downturns, the share of pay-as-you-go spending for capital projects cannot drop below 25 percent of the previous year’s share.
2. A Constitutional Amendment is proposed to require that funds borrowed by the State must be used only for capital projects. This amendment prohibits the borrowing for operating expenses, including the salaries of employees and consultants.
3. Debt Reduction Reserve Fund. The Assembly allows the Debt Reduction Reserve Fund to be used for pay-as-you-go financing of programs that had previously been bond financed. This will allow for decreased reliance on debt.
The Assembly denies the Executive’s proposal to dedicate 75 percent of the monies coming to the State from the tobacco master settlement agreement.
Legislative Proposals
School Construction/STAR/Debt Reduction Reserve Fund
The Assembly creates the School Construction/STAR/Debt Reduction Reserve Fund to be comprised of surplus revenues from each fiscal year starting in the State Fiscal Year 1999-2000. This fund will have the following purposes:
-- $100,000,000 will be provided for school construction purposes pursuant to Chapter 56 of the laws of 1998, otherwise known as RESCUE, for eligible school construction projects including new construction, modernization and reconstruction, physical capacity expansion, emergency projects, maintenance and repair, health and safety, accessibility and educational technology for schools.
The remaining surplus funds shall be directed for the following purposes:
-- 40 percent shall also be provided for school construction purposes pursuant to RESCUE;
-- Up to 30 percent shall be made available for the increase in obligations for the STAR provisions for each year succeeding the base year amount as currently required;
-- The remainder shall be directed to reduce the outstanding debt of the State.