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.