New York State Governor Mario M. Cuomo said yesterday he will not support any more bond issues until lawmakers pass measures to reform the state's borrowing practices.
The governor, speaking to about 200 public finance officials and market executives at the Bond Buyer Municipal Finance Conference, said his $800 million "Jobs for the New, New York Bond Act" will be his last bond act, unless the state Legislature supports a package of fiscal reforms.
"I won't do any more bond issues after this one if the Legislature doesn't reform long-term borrowing," Cuomo said. "And the Legislature can't do a bond act without the governor."
Cuomo used the conference luncheon address to push his general obligation bonding proposal, which will appear on the Nov. 3 ballot for voter approval. The jobs bond act will be the fifth bonding inittative Cuomo has put before state voters. The governor's last proposal, the $1.95 billion "21st Century Environmental Bond Act," was rejected by state voters in 1990. The other three passed.
The governor is now hoping that New York's economic slide will place state voters firmly behind his initiative, which will be used to rebuild roads, bridges, and make other infrastructure improvements.
Economic aides to Cuomo say the bond act will immediately create 25,000 construction jobs, and 100,000 to 200,000 permanent jobs before the end of the decade.
Many private economists, however, have said the bonding will do nothing more than increase the state's already high debt load.
During his speech. the governor also directed criticism at New York State Comptroller Edward V. Regan. Regan has termed the bond act "a laudable goal," but said voters
An article that appeared yesterday gave the wrong name for a mayors group involved in a survey of political candidates' views on infrastructure. The correct name is the U.S. Conference of Mayors. should turn down the proposal until the state enacts a set of fiscal reforms he has advocated since 1991.
"Whatever you do," Cuomo said, "don't say, this is a good idea,' but because the Legislature will not enact your reforms, you will kill the bond issue. That would be a sin."
Despite his criticism of the comptroller, Cuomo said he and Regan agree on one topic - the need for fiscal reform. During the speech and in a subsequent interview, Cuomo said he supports the fiscal reform package advocated by Regan. These measures would force the Legislature to give 30 days' notice before it can appropriate the sale of debt;
The state's reliance on appropriated debt, which does not need voter approval, has been criticized by the comptroller and the Wall Street rating agencies. The state has issued $17.5 billion outstanding in these securities, compared to $5.8 billion in Gos, according to Moody's Investors Service.
Appropriated debt, unlike Gos, is not backed by the full faith and credit of the state. As a result, it often receives a lower credit rating than state general obligation bonds. Standard & Poor's Corp. grades state GOs A-minus, while Moody's rates these securities A, and Fitch Investor's Service Inc. rates them A-plus.