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A new report recently released by State Comptroller Thomas DiNapoli has identified policies and fiscal weaknesses he says have allowed state debt to grow to troubling levels.
Debt service is projected to consume an increasing share of State Operating Funds spending over the next five years, growing from 5.4 to 5.9%. This constricts flexibility in the operating budget and leaves fewer resources available for other priorities and programs.
“New York state has a history of misusing borrowing to pay for short-term needs while a backlog of long-term infrastructure projects languishes,” DiNapoli said.
New York state has one of the nation’s highest debt levels. Since the Debt Reform Act was passed in 2000, state-supported debt outstanding increased by $25 billion.
In a review released in June 2022, Standard & Poor’s cited New York’s “moderately high and growing debt levels” as one factor preventing it from achieving a higher credit rating. In September 2022, Moody’s ranked the state as having the second largest debt burden in the nation behind California.
DiNapoli says restoring prudent debt practices is an essential component for improving the long-term sustainability of New York state’s fiscal health, keeping debt costs down for taxpayers, and more effectively deploying the state’s resources to pay for infrastructure needs.
