Each quarter, New York State’s Division of Budget releases updates to the state’s financial plan. The latest report, which was published in November, included, once again, details on state debt. As one might guess, with our state’s reputation for spending, the state debt load is among the highest in the nation. Our outstanding debt is nearly $54 billion — second only to California.

Also, it may not come as a surprise that the state budget only scratches at the surface of paying down that debt. Of the nearly 

$54 billion in outstanding debt, the 2018-19 state budget only authorized paying back 

$5.6 billion of what is owed. In essence, if the state were a household with credit-card debt, it would only be paying its minimum balance along with some interest charges. On top of this massive borrowing, the Division of Budget estimates outstanding debt will grow. Projections indicate that by the fiscal year 2020, the outstanding debt will reach $57 billion and as much as $64 billion by 2023.

The state constitution limits using debt without voter approval to help ensure that New York does not over-borrow. Unfortunately, for several decades, the state, for a variety of reasons, has circumvented the state constitution by having public authorities and agencies borrow on behalf of the state. This borrowing is referred to as “backdoor borrowing” and it accounts for almost all of our state debt — $51.4 billion of the nearly $54 billion of state debt. Regardless of who issues this debt, the state — meaning you and me as taxpayers —are still on the hook to pay it back.

Using debt as financing isn’t on its face improper, or even bad public policy, provided it is used sparingly and for capital projects. Problems arise when debt is overused, used for operational expenses, and is made difficult to track. Unfortunately, this accurately describes much of our state’s backdoor borrowing. 

To curb our state’s addiction to debt, in this upcoming session I plan to introduce legislation that will limit our state’s overreliance on debt and backdoor borrowing. Just like any household, the state must learn to live within its means. My legislation will require all backdoor borrowing to be lined out and be primarily issued for capital projects that help finance our roads, sewers, or other public-works projects. In addition, we need to increase transparency among all authorities and require by law that each authority submit an annual report to members of the legislature and to the governor. I co-sponsor legislation that would increase these debt-reporting requirements that would help during budget negotiations. In addition, the state should begin using a portion of any future settlement dollars it receives to pay down its debts to save taxpayers in the long run. This just makes good financial sense and would help protect future generations of New Yorkers.       

William (Will) A. Barclay is the Republican representative of the 120th New York Assembly District, which encompasses most of Oswego County, including the cities of Oswego and Fulton, as well as the town of Lysander in Onondaga County and town of Ellisburg in Jefferson County. Contact him at barclaw@assembly.state.ny.us or (315) 598-5185.

But many critics say taxpayers got hosed

Amazon recently announced it will place half of its second headquarters (HQ2) in Queens. This will eventually bring 25,000 good-paying jobs to the Big Apple.

New York City Mayor Bill de Blasio and New York Gov. Andrew Cuomo proclaimed this as a huge victory. But many a critic reckons the state and city got hosed. This because their taxpayers will pay Amazon at least $1.5 billion to move to Queens.

Union guys love the move. The deal requires union workers for all the construction projects.

Meanwhile, some residents may hate it. The city’s subways, bridges, roads, and tunnels are already in sad shape and overwhelmed. The Amazon development will only make things worse, they argue.

Other critics say the city paid way too much for the jobs. They argue that Amazon wanted to come to New York anyway. The city is home to more high-tech workers than any other city. The Washington, D.C. area ranks second. Amazon will locate the other half of its HQ2 in that region, in Northern Virginia.

In other words, Amazon will locate to where the most tech workers already live. What better locations for recruiting employees? The question is whether these locales had to bribe Amazon as much as they did.

Politicians love projects like this. Because they can boast that they brought thousands of jobs to a region. In this case you can remove the “r” from the word “brought.” They bought the jobs for one region — with money they took from other regions.

This is true in both a direct and indirect sense. In the direct sense, you pay taxes to the state. Your governor and legislators decide how to use the money. Sometimes they send tax money your way. Sometimes they send it elsewhere.

In the indirect sense they have taken money from Upstate for decades. Their tax and spend policies certainly helped sap upstate’s economy. As did federal policies.

The declines did not come by accident. One huge factor was that the state became one of the worst in the nation in which to operate a business. In surveys too numerous to count, New York has ranked at or near the bottom in business-friendliness.

The plain fact is that operating a business in this state is more difficult and less rewarding than in most of the other states. As their factories aged, too many companies decided New York was not the best state in which to invest in a new plant. Many companies moved jobs abroad. Others moved jobs to different states. And other businesses simply threw in the towel.

The states that were more attractive have lower taxes than New York — lower income taxes, property taxes, and lower and fewer taxes on business. They have fewer smothering regulations and foist less red tape on businesses.

In the economies of those states, government has a smaller footprint. Government bleeds their economies less than government does here.

Our state politicians work overtime to come up with special treatment for companies like Amazon. They offer tax breaks and regulation relief to try to lure ventures. By doing so, they admit that taxes and regulations make a difference.

Well, if they make such a difference, why not reduce them in every corner of the state? Why limit them to only a few areas? The politicians won’t think of doing that because the costs of their huge government won’t allow it. They would have to shrink government to pay for the tax breaks for all.

That ain’t gonna happen, of course. That, of course, does not erase a few simple realities of economics: When you tax and regulate more, you smother economic development. You drive businesses and people away. When you tax and regulate less, you encourage the opposite.

From Tom…as in Morgan.        

Tom Morgan writes about political, financial, and other subjects from his home in upstate New York. He has a new novel out, called “The Last Columnist,” which is available on Amazon. Contact Tom at tomasinmorgan@yahoo.com, read more of his writing at tomasinmorgan.com, or find him on Facebook.