July 28, 2005
Hevesi Supports Extension of Financial Control Board for New York City
New York State Comptroller Alan G. Hevesi today praised the State Legislature for having extended the life of the New York City Financial Control Board for another 30 years. Speaking at the annual meeting of the Financial Control Board today, Hevesi praised Mayor Bloomberg for stabilizing the City’s finances, adding that he supports extending the life of the board, which had been scheduled to terminate on July 1, 2008. Two years ago, the legislature agreed to assume the cost of outstanding bonds issued during the financial crisis of the 1970s. In doing so, the Legislature also extended the life of the Financial Control Board, which was formed during the fiscal crisis to enforce fiscal discipline on the City.
“Thanks to the State Legislature’s foresight, the board will be around for another 30 years. It’s good public policy and it’s good fiscal policy,” Hevesi said.
The Control Board is chaired by the Governor and includes the Mayor, the State Comptroller, the City Comptroller, and three members of the private sector. The Control Board oversees the City’s finances and has the authority to impose a “control period” if the City strays from prudent fiscal practices.
At the City’s request, in August 2003, the State Legislature agreed to assume the cost of outstanding bonds issued by the Municipal Assistance Corp. (MAC) that date back to the 1975 fiscal crisis. This was done in order to help the City overcome the fiscal crisis precipitated by the attack on the World Trade Center. The MAC refinancing initiative is expected to save the City $2.5 billion through FY 2008, but at a cost of $5.1 billion to the State over a 30-year period. At the same time, the legislature extended the life of the Financial Control Board, which oversees the City’s finances, for another 30 years.
“While the Governor and I both opposed the MAC refinancing initiative because of its excessive cost, the Control Board has served the City well over the past 30 years and should remain in effect indefinitely, or at least as long as the State is responsible for paying off the City’s fiscal crisis debt,” Hevesi said.