New York’s local governments had $43.6 billion in total outstanding debt in 2018, according to a report released today by New York State Comptroller Thomas P. DiNapoli. Total debt has remained fairly steady since the Great Recession, after more than doubling from 1998 to 2010. A major factor behind the slower debt growth over the last ten years is that school districts have borrowed less.
“Borrowing helps local governments to build roads, bridges, and schools and buy equipment,” DiNapoli said. “Too much debt can make it difficult for a community to adjust if a recession hits or can limit its ability to take on critical infrastructure projects. When a local government issues debt, it should have a long-term plan in place and be mindful of the impact on its budget and taxpayers.”
Local government debt more than doubled from 1998 to 2010, jumping from $20.8 billion to $44.1 billion in 2010, an average annual rate of 6.5 percent. Since 2010, total debt dropped to $43.6 billion at the end of local fiscal years ending in 2018. New York City debt is not included in this analysis.
School districts have the lion’s share of local debt at $17.1 billion in 2018, or nearly 40 percent, which amounts to an average of $10,914 in debt for each student. Annual debt service costs for schools are partially reimbursed through state building aid, which offset about 69 percent of costs in 2018. The amount of debt varied greatly among school districts, with Buffalo City School District at the high end with $807 million in outstanding debt. The Rochester City School District fell in second place with $487 million in debt. Worcester Central School District in Otsego County had the highest debt per student at $57,410.
Counties accounted for $13.4 billion in debt in 2018, or 31 percent of the total, while towns followed next with $6.2 billion, or 14 percent. Nassau County had the highest debt of any local government, with $4.1 billion outstanding in 2018. Suffolk County was second with $2.2 billion in 2018. Nassau County was also home to the town and village with the highest debt in the state. The Town of Oyster Bay reported $744 million in debt outstanding in 2018, an increase of 64 percent from 2008. The Village of Freeport had $102 million in debt, down 33 percent from 2008.
Overall, local debt per capita was $3,916, with downstate counties averaging $4,441 per capita. Nassau County had the highest overall debt per capita ($5,580) and Washington County had the lowest ($2,324).
Spending by local governments to repay debt increased 6 percent over the last decade from $5.1 billion to $5.5 billion. Interest payments have declined by 12 percent over the same period as the cost of borrowing has decreased. DiNapoli noted that local governments ranked in fiscal stress by his office (link) experienced a 7 percent increase in debt between 2010 and 2018.
See the appendix for a county-by-county breakdown of debt by category of local government, or go to: https://www.osc.state.ny.us/localgov/pubs/research/local-government-debt-trends-practices-nys.pdf.
