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Wednesday, May 31, 2000
The New York State Senate today gave first passage to a constitutional amendment that would strengthen the statutory debt reform amendments that were passed in the 2000-2001 State budget by completely eliminating backdoor borrowing, placing a cap on new outstanding debt and giving voters greater say on borrowing proposals.
�This is a very tough debt reform amendment that would build on what we enacted earlier this year,� Senate Majority Leader Joseph L. Bruno said. "I want to commend Governor Pataki for his leadership in pursuing the issue of debt reform. We have already done so much to improve the state's economy, and an aggressive move to reduce the state's debt will improve it even more.�
Senator Bruno pointed out that this is the fifth debt reform amendment to pass the Senate in the last eight years. Previous debt reform proposals were passed in 1993, 1994, 1995 and in 1999.
�Senate Republicans have long targeted debt reform as a priority and this year we have a unique opportunity to reform our borrowing practices, strengthen our economy and reduce the burden of debt that will be passed on to our children and grandchildren,� Senator Bruno said. �The challenge now rests with the Assembly to join with the Senate and Governor Pataki in supporting a debt reform constitutional amendment.�
"Reducing debt ultimately strengthens our economy by improving the state's credit rating, thus reducing high interest rates paid by taxpayers," said Senator Ronald B. Stafford, (R-C, Plattsburgh), Chairman of the Senate Finance Committee. "A disciplined debt reform plan encourages business investment, economic growth and stabilization."
The debt reform amendment (S.6306A) includes the following provisions:
> Eliminate �backdoor� borrowing;
> Allow only voter-approved, General Obligation debt or debt that is backed by specific revenues of the State;
> Constitutionally cap new outstanding debt at four percent of the state�s personal income;
> Constitutionally cap new debt service at five percent of All Funds receipts;
> Require that one-half of all new debt issued must be voter-approved, General Obligation debt.;
> Constitutionally limit the issuance of debt to capital purposes only;
> Constitutionally limit the maturity on new debt to 30 years;
> Allow multiple bond acts on the ballot.
�By partnering with the Governor, we have developed a debt reduction plan that attacks both the causes and effects of the debt problem by prohibiting all "backdoor borrowing," or borrowing that is not approved by the state voters and putting in place a "debt cap" to limit the state's ability to borrow,� Senator Bruno said.
New York State currently carries an estimated $37 billion in debt. New York State's per-capita debt load is the fourth highest in the nation, according to Moody's Investor Service.
The bill was sent to the Assembly.
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