For
Immediate
Release:
March 13, 2007
SENATOR
STACHOWSKI INTRODUCES LEGISLATION DESIGNED
TO
LIMIT STATE DEBT AND "BACKDOOR BORROWING"
Saying "state debt is akin to running up credit card
bills that your children and grandchildren have to
pay," State Senator William T. Stachowski (D-Buffalo),the
ranking Democratic member of the Senate Finance Committee, today
announced he has introduced legislation that would put the brakes on
New York State's borrowing habits.
Senate Bill 2884 would create a New York
State Debt Management Board, which would issue guidelines for issuing
State-related debt and other capital financing matters, while S.2885
would amend the State
Constitution to prohibit all "back door" borrowing —
money borrowed by the State's public authorities
without public approval.
"For far too long, New York State has been
undisciplined when it comes to our debt, and ineffective when it comes
to managing debt. The money we borrow now will cost our grandchildren
billions more in generations to come. Just as no citizen or business
would borrow money in such a reckless fashion, it is imperative that we
get our fiscal house in order," Senator Stachowski said.
The Debt Management Board would consist of
representatives of the Governor, Comptroller, Budget
Director, and the Majority and Minority Leaders of both the
Senate and Assembly.
The Board would recommend policies to the Governor
and the Legislature about issuing debt and other
capital financing matters, and its policies would lead to a
higher degree of restraint when it comes to
borrowing.
While prohibiting backdoor borrowing, the amendment,
if passed, would allow some borrowing by authorities, but it would be
subject to a phased-in cap. In addition, no new debt would be issued
unless the total outstanding principal amount of debt authorized and
contracted, after the amendment takes effectwould be less than a
designated percentage of the total personal income of the State.
Senator Stachowski said debt reform is key component
of the Senate Democrats' effort to improve Upstate's economy, and said
he plans to meet with local business leaders to discuss his proposals.
He noted that the Senate Democratic Conference has spent the past
several years focusing on the reckless spending practices of public
authorities and the way New York State has run up its debt.
"If we continue our current practice of borrowing to
spend, we will leave our children and grandchildren
with a bill that will take money out of education, economic
development, health care and other
initiatives that will help this region regain its economic
strength. With the leadership of Governor
Spitzer, we can turn the corner and forget the past of
trying to get by for the moment, and leaving our
fiscal problems to future generations to solve," Senator
Stachowski concluded.
Senate bill 2884 is currently in the Senate Finance
Committee, and 2885 has been sent from the Judiciary
Committee to the Attorney General's office for anopinion.
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