Post Standard-Syracuse NY 11/15/09 By Michelle Breidenbach and Glenn Coin
If Gov. David Paterson and state legislators continue to do nothing about the way they spend money, the state’s general bank account will be $1 billion short at the end of December, according to state Comptroller Thomas DiNapoli, the man who writes the checks.... The state has already dipped into its short-term investment pool, or cash reserves, for $5 billion. There is not enough left to raid. It is an option for the state to borrow money, but DiNapoli says the state has borrowed enough for cash-flow emergencies. In fact, the state already owes $10.4 billion to bondholders for the times it borrowed money for operating expenses. That’s 18 percent of the total $57 billion in state debt. Borrowing for spending money limits the state’s ability to borrow for buildings, construction and equipment — the kinds of purchases a state normally finances with long-term bonds. The state has limits on borrowing, but all it takes to raise those limits is an act of the state legislature. The state also has found a way around the Constitutional requirement that new debt be approved by voters. Lawmakers simply direct public authorities to issue bonds for them. There is no science about when too much borrowing could threaten state bond ratings, DiNapoli said. DiNapoli and others say the only way to put the state on solid financial ground is for the state to stop spending more money than it raises.
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