Assemblyman Joseph D. Morelle, D-Irondequoit, and state Senator Thomas Libous, R-Binghamton, today announced legislation calling for sweeping reforms of New York’s public debt policies, including a constitutional amendment capping total state debt and the creation of a new fiscal management board.

The proposals also place stringent new controls on borrowing by the state’s public authorities, which critics say operate without sufficient oversight, and would use budget surpluses to offset borrowing and pay down the state’s long-term debt balance.

The legislation resulted from two reports issued last year by Comptroller Alan G. Hevesi, who joined Morelle and Libous at today’s announcement.

“Failure to enact meaningful debt reform will result in a state government increasingly unable to meet its obligations to its citizens, and amounts to the mortgaging of our children’s futures,” Hevesi said. “I applaud Assemblyman Morelle and Senator Libous for their leadership on an issue so vital to every New Yorker.”

In February 2005, Hevesi released New York State's Debt Policy: A Need for Reform, and followed it in December with another report entitled Debt Affordability Study. Both warned of the state’s increasing long-term red ink and decried the practice of borrowing to artificially resolve budget deficits.

New York amassed $36.8 billion in debt from its founding through FY2000. As of this year that total has surpassed $50 billion, an increase of 28 percent. New York ranks second only to California in total indebtedness, and fourth as measured in per capita terms.

The Morelle-Libous proposals would amend the state constitution so that outstanding debt could not exceed 5 percent of the aggregate of New Yorkers' personal incomes. Currently, that figure is 6.5 percent. The new cap would take effect in 2014.

“It’s clear that the problem is real and getting worse,” Libous said. “We need a responsible and disciplined approach to stem out-of-control spending. Capping state debt and creating a Fiscal Management Board is an open and accountable way to protect the future generations of New Yorkers from skyrocketing taxes to pay for today’s debt.”

Business leaders and nonpartisan citizen watchdog groups voiced their support for Morelle and Libous’ effort.

Daniel B. Walsh, president of The Business Council of New York State, said that “This legislation represents the type of fundamental, iron-clad fiscal reform this state needs.” Diana Fortuna, president of the New York City-based Citizens Budget Commission, said the proposals are “consistent with the CBC’s principles on debt reform and would make an important contribution to the long-run fiscal health of New York State.”

Typically, government debt is incurred through major projects such as the construction of roads, bridges, mass transit systems and sports facilities.

“Reasonable borrowing practices can fuel economic growth and provide the high-quality infrastructure New Yorkers are rightly proud of,” Morelle said. “But we must begin to think in terms of pay-as-you-go alternatives, just as individuals do to avoid excessive credit card balances.”

“These needed reforms can help build the foundation for smarter, leaner and more accountable state government,” Libous added.

Learn More About New York's Public Debt

Use the links below to read Comptroller Hevesi's reports from 2005 and review the legislation announced today by Assemblyman Morelle and Senator Libous.

New York's State's Debt Policy: A Need for Reform

Debt Affordability Study

A11515

A11516

About NYS Assemblyman Joseph D. Morelle

Since 1990, Assemblyman Joseph D. Morelle has represented the 132nd Assembly District, which includes portions of the city of Rochester and the Monroe County suburbs of Irondequoit and Brighton. During his tenure in the NYS Legislature, Joe has made economic development and expanding employment opportunities his top priority.