March 18, 2011
DiNapoli: Early Passage of Debt Service Bill a Good Sign
State Comptroller Thomas P. DiNapoli said the passage of the State's debt service bill earlier this week was a strong signal that the state legislature recognizes the importance of paying the state’s debts. DiNapoli said the bill's passage 15 days prior to the start of the fiscal year continues a long standing practice of legislative approval of debt service appropriations by the start of each new fiscal year in order to ensure that the state will be able to meet its debt obligations.
“All the misguided talk about allowing states to declare bankruptcy makes it imperative that New York act responsibly, especially when it comes to paying state debt” DiNapoli said.”New York needs to maintain access to the capital markets.”
“And the early passage of the debt service bill is evidence that the state takes its responsibility to its bondholders seriously.”
DiNapoli has been critical of the state's borrowing practices and has cited the state’s inappropriate use of debt, its failure to adequately prioritize projects and its extensive use of back door borrowing.
DiNapoli noted that recent attempts to convince Congress to enact laws to permit states to declare bankruptcy have been at best ill-conceived and at worst wantonly destructive.
DiNapoli has repeatedly called for comprehensive fiscal reform, including major reforms to the State's debt practices, to ensure that New York's current and future taxpayers receive the maximum benefit from the State's limited debt capacity and are not unduly burdened with unnecessary debt.