New York Gov. Mario M. Cuomo yesterday called on the staffs of the state Legislature to return early from their annual recess to work on unfinished items, including a host of bonding proposals.
When the state's 1992 legislative session ended Friday morning, lawmakers still had not determined the fate of several key financing measures. This legislation included: deficit bonding proposals for the Long Island counties of Nassau and Suffolk; New York City's authority to issue bonds through negotiated sale; and an $800 million bond act for jobs and economic development.
Legislative sources said lawmakers have not decided if, and when, they will return to Albany, to convene a special session dealing with these issues. Both Nassau and Suffolk officials continued to meet with state budget officials yesterday to plead their cases for deficit bonding.
The final days of the session were marked by an unusually high level of political bickering over these issues, which pitted Senate majority leader Ralph J. Marino, R-Mutton-town, against Assembly speaker Saul Weprin, D-Queens, and Gov. Cuomo. In the end, there was no compromise.
Mr. Cuomo, who requested the shortened recess during a press conference in Albany, said the full legislature would not need to return for a vote on the measures until a general accord between the Senate and Assembly staffs has been reached.
The major credit rating agencies are closely monitoring the counties' deficit financing plans, which are the largest among the seven New York municipalities calling for state legislation to issue deficit bonds. Two other municipalities, the towns of Frankfurt and Huntington, received approval from lawmakers to sell $2.2 million and $7.3 million in deficit bonds, respectively, and are now awaiting Gov. Cuomo's signature.
Officials at the rating concerns said they will comment of Nassau and Suffolk counties' rating trends only after the counties submit more detailed financial plans designed to achieve a structurally balanced budget.
Moody's Investors Service rates Nassau County general obligation bonds A and Suffolk County GOs Baal. Standard & Poor's Corp. rates Suffolk bonds BBB, while Fitch provides an A rating. Neither Standard & Poor's nor Fitch rates Nassau County GOs.
In another area of uncertainty New York City officials contacted lawmakers over the weekend to press for the negotiated sale approval, as well as legislation to issue yen-denominated bonds to Japanese investors. The city would need state approval for its next scheduled GO bond sale in October, but it could complete a proposed yen-denominated sale without legislation by issuing the securities through a special-purpose corporation.
"I spoke with Saul Weprin Friday and Sen. Marino just moments ago and asked Sen. Marino to bring back his entire staff [today] to continue discussions on the entire agenda," Mr. Cuomo said yesterday morning. "All of these pieces were left undone when Sen. Marino terminated the work of the Senate on Friday morning. He has agreed to get his staff back tomorrow."
The turbulent end to the state's legislative session was indicated of the politics that underscored the various bonding proposals.
For Mr. Marino, a Republican from the Long Island of Oyster Bay, the goal was to help fellow Republicans in Nassau and Suffolk counties close large budget deficits with bonds. The state Senate passed legislation early Wednesday morning, giving Nassau and Suffolk counties authority to issue deficit bonds and enact separate tax increases to pay for the bond sales.
Suffolk County is seeking state approval to issue up to $91 million in four-year deficit bonds and to raise its sales tax to 8%, closing a projected $91 million deficit in its $1.3 billion budget for fiscal 1992, which ends Dec. 31.
Nassau County is asking the state to approve the sale of up to $71 million five-year deficit bonds, as well as a new 1% mortgage tax to close a $131 million projected gap in its $1.8 billion fiscal 1992 budget, which also ends Dec. 31.
If the legislation is not approved, county officials say they would be forced to make sharp reductions in their municipal work force and raise property taxes, which are among the highest in the country. In fact, county officials said they designed the deficit bonding and tax plans to avoid a need for the politically unpopular tax.
But the Assembly leadership refused to sign on, and instead called for the establishment of financial control boards to oversee the fiscal affairs of each county. This mechanism would resemble the one set up to oversee New York City's finances after the fiscal crisis of the mid-1970s. The board would have access to county financial information and have the authority to approve or reject all borrowing proposals.
In a telephone interview, Mr. Weprin said he is "willing to compromise" with the Senate on finance proposals, but says he wants "some kind of oversight" for municipalities seeking state legislation to issue bonds or enact tax increases to address budget problems. Officials from Mr. Marino's office were unavailable for comment yesterday.
At the same time, Mr. Cuomo, recently rumored as a Democratic vice presidential candidate, refused to sign the Nassau and Suffolk measures without a complete review of the counties' fiscal situation, he said.
"I will not approve a tax raise on people who are already in deep trouble," Mr. Cuomo said last week. "I don't care if they're Democrats or Republicans, they're raising taxes at maybe the worst time since I've been here."
At the same time, the Senate refused to approve Mr. Cuomo's $800 million "Jobs for the New, New York" bond act even after reaching an accord with the state Assembly Thursday night.
The bond act, designed to create 100,000 jobs during the next decade, is a high-priority item for Mr. Cuomo. The measure, if approved, would be placed on the November ballot.
New York City, despite a recent string of positive developments concerning its budget and borrowing needs, found itself caught in the political crossfire.
After negotiations between the Senate and Assembly turned sour, lobbyists for the city said they were unable to persuade the Senate to approve a bill giving the city authority to issue bonds through a negotiated sale. They also said they could not get the Senate to pass a measure making technical corrections to legislation giving the city authority to sell variable-rate debt. The Assembly had approved both measures.
The city, which sold $5.4 billion in negotiated debt in fiscal 1992, needs legislative approval each year to conduct negotiated sales.
