New York government is so mismanaged and this is mess is just getting worse and worse every year. Borrowing? How can they borrow with out voter approval? When is the last time we voted on a borrowing plan in this state? Think about that for a minute.
The situation has gotten to the point that the money paid to service the debt on the CHIPS program (about $402 million this year) is more than the amount of money being allocated by the state to localities for road repairs.
We voted in 1999 for one and it was on repairs for roads.
According to the NY Constitution “They” cannot borrow without voter approval. So how do they continue to borrow with out us voting? Authorities do it for them. Have you heard the commercials lately asking for you to purchase bonds for the dormitory authority and the newest one for rebuilding the water supply system in this state…
This is a back door, unconstitutional way of borrowing. By doing this they circumvent the LAW and then they have just a windfall of cash to do with what they want. It is out of control and we just sit back and allow it to happen.
Debt payments alone are bankrupting this state and our debt is huge and it continues to grow.
New York’s hole just gets deeper
ALBANY – How has New York ended up in such a deep financial hole? An important clue is buried deep within budget documents and in an annual debate on the floor of the Assembly that almost no one pays any attention to.
It involves paving roads, trying to help localities and borrowing money. The program that does all three is known as CHIPS (Consolidated Local Street and Highway Improvement Program).
The program was the brainchild of then-Transportation Commissioner William Hennessey in the 1980s, who wanted to provide local governments with help maintaining their roads. The state, flush at the time, decided to send about $220 million a year to localities for that purpose.
As it was then, it remains very popular now with local officials, which made it difficult to cut when the state hit one of its periodic budget crisis in 1991, Assemblyman William Parment, D-Jamestown, Chautauqua County, recalled.
The answer? Start borrowing the money rather than paying for it out of current revenues. That, in Parment’s view, is when the problems started.
Since that time, the state has borrowed money to pay for the program, which now costs about $347.5 million a year. The pile of debt has swollen to about $3.5 billion.
While debt for some purposes can be good (for things that last a long time) Parment thinks the idea of borrowing money – which has to be repaid with interest – for a recurring expense, like road repairs that are supposed to last 10 years, is fiscally reckless.
Borrowing for recurring expenses is, in the words of former Assembly Minority Leader Clarence Rappleyea, like taking out a mortgage to buy groceries.
The situation has gotten to the point that the money paid to service the debt on the CHIPS program (about $402 million this year) is more than the amount of money being allocated by the state to localities for road repairs.
“How crazy is that?” Parment asked. “The only ones that can be happy with the situation are the people who are lending us money.”
The state, of course, does have a constitutional protection against what could be considered reckless borrowing: Voters have to approve via a referendum any borrowing the state plans to do.
