According to the state comptroller, New York’s current total state debt, roughly $65 billion, is second only to California. In other words, New York State has the second-highest debt total in America. On a debt-per-capita basis, New York is fifth among all states.
This debt load will reach nearly $72 billion over the next several years, the comptroller predicts, with the state projected to issue “50 percent more debt than it will retire.” By the end of the state’s 2021-2022 fiscal year, state taxpayers will be on the hook for more than $8 billion a year just to service the state’s existing debt. Not to reduce the debt, keep in mind, only to keep up with the required payments, especially interest, over time.
Among many other consequences, rising debt service costs limit the state’s ability to enhance ongoing programs and services, or cut taxes and eliminate fees.
The Albany-based Empire Center, using data from the U.S. Census Bureau and Bureau of Economic Analysis, puts state and local government debt per person in New York State at $17,528. That equals the highest debt rate per capita in the United States, significantly higher than 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. However, for the purposes of this column, as we start looking ahead to the beginning of the next legislative session in January, my point is straightforward: The next time you read or hear about the latest call for bigger spending by New York State government, remember the debt load taxpayers already shoulder. It is already the second-heaviest burden in the nation. It is already on track to keep rising, significantly, without any help at all from New York State’s next big spenders.
It is an incredibly complicated fix and the intention here is not to minimize or simplify its complexity or difficulty. Nevertheless, 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 more rapidly 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’s big spending is not new to the scene. The current debt burden isn’t the result of an overnight spending binge. It is the result of continually neglecting, over time, the consequences of past bad spending practices.
The burden on future generations is already alarming. We better get focused on making it more manageable, not making it worse.