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A Burden On Future Generations

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Senator Tom O'Mara

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An alarm goes off every now and then in New York State. But in my opinion, not nearly enough in this case.

Late last year, the state comptroller released a report highlighting the fact that New York State’s current total state debt, roughly $64 billion, is second only to California’s, which is at $87 billion. To put it another way, New York State has the second-highest debt total in America. 

According to the comptroller, the state’s debt load is just going to keep increasing in the foreseeable future, reaching nearly$72 billion over the next four years. Our state’s annual debt service payments, according to the comptroller’s report, will move beyond $8 billion annually by the conclusion of the state’s fiscal year in 2021-2022.

That’s right. New York State taxpayers will be on the hook for more than $8 billion a year just to service the state’s existing debt. Not to necessarily reduce the debt, mind you, only to keep up with the required payments, especially interest, over time. Rising debt service costs limit the state’s ability to fund ongoing programs or balance the budget, to say the least.

Or to look at it even more direct terms for every man, woman and child in New York: According to the Albany-based Empire Center, using the latest available data from the U.S. Census Bureau and Bureau of Economic Analysis, state and local government debt per person in New York State is pegged at $17,528. That equals the highest debt rate per capita in the United States, significantly higher that the next highest state of Massachusetts ($13,733).

The fact of New York State’s current debt load raises plenty of questions and numerous proposals for reform. For the purposes of this column, however, my point is straightforward: The next time you read or hear about the latest call for bigger spending in New York State, remember the debt load taxpayers already have to shoulder. It is already the second-heaviest burden in the nation. It is already on track to keep rising, without any help at all from New York State’s next big spenders. 

It is an incredibly complicated fix – and I don’t mean to minimize or simplify its complexity or difficulty at all – but controlling state spending, for the long term, strikes me as priority number one. It’s at least one commonsense strategy and the reason I have long supported and voted for enacting a permanent, strict cap on annual state spending. The less the state spends on ever-growing, and larger and larger, programs and services, the more fiscal flexibility the state will have to focus on doing things like cutting taxes or reducing debt.

We have to get a handle on it. We have to become serious about getting it under control. The practice of “pay as you go” needs to become the norm, not the exception. When the state gets a windfall it should go to pay down the debt, not to the governor’s favored developers as economic development incentives.

Imagine what could be accomplished if the state wasn’t strapped with an annual $8-billion debt service payment?  We could level the playing field and begin making New York State a competitive place to do business and create jobs for all, not just the chosen few.

New York State has been a big spender for a long time. The current debt isn’t the result of an overnight spending binge. It’s the result of continually neglecting, over time, the consequences of past bad spending practices.

The comptroller’s December 2017 report (“Debt Impact Study: An Analysis of New York State’s Debt Burden,” https://www.osc.state.ny.us/reports/debt/debt-impact-study-2017.pdf) concludes with this statement, “Comprehensive reforms of the State’s debt policy and capital planning practices are needed to ensure that New York can address its capital infrastructure needs over time, while keeping debt costs affordable and reducing the burden on future generations.”

The burden on future generations is already alarming. We better get focused on making it more manageable, the sooner the better.

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