New York State Governor-elect George Pataki is expressing doubts about the debt reform plan advocated by his former adversary, lame-duck Gov. Mario M. Cuomo.
Pataki, who defeated Cuomo in last month's gubernatorial election, said he has "reservations" about the plan, passed last year by the state legislature after intense lobbying by the Cuomo and his Democratic Party running mate, state Comptroller H. Carl McCall.
The plan would amend the state constitution. For that to happen, the proposal must receive legislative approval once again, and then be approved by voters in the state. The vote could take place in November of next year.
As a state senator, Pataki, a Republican, voted against the plan.
Although he has no direct role in the process, Pataki may now use his office as a bully pulpit and rally the Republican-controlled state Senate to reject the plan or force dramatic changes in its contents.
"We'd rather see real debt reform sooner than later, but I did have reservations about whether this constituted real reform," Pataki said.
The proposal, which received first passage in June along with the state's fiscal 1995 budget, would dramatically change the state's much maligned borrowing practices. Under die plan, the state would rely on a new form of revenue debt and voter-approved general obligation bonds to fund most capital projects.
The proposal would largely discontinue the state's use of so- called appropriated bonds, or debt sold by the state through its authorities without voter approval.
In addition, the proposal attempts to limit the amount of debt the state can sell. New York State has about $29 billion of tax-supported debt outstanding, one of the highest debt loads among states in the country.
But the proposal would allow New York to issue new bonds, without voter approval, equal to 1% of total state personal income in the first year the amendment takes effect. The plan would then allow additional nonvoter-approved bond sales of 0.33% of total personal income each year for the next nine years, and 0.4% of total personal income in the final year of the program.
Officials in the Cuomo Administration say the cap would reduce the state's outstanding tax-supported debt. But many market observers, including those who are part of Pataki's transition team, say the cap does little to reduce state borrowing.
Pataki appears to be siding with those who believe the reform does too little to restrain the state's appetite for debt. When asked what are his concerns with the proposal, Pataki said: "Number one is the level of debt that would be authorized without public approval." He did not elaborate.
Pataki recently discussed the issue with McCall, who supports the proposal, but says that it could be strengthened in several areas.
For example, the comptroller says that the cap on nonvoter-approved debt could be tightened to force the state to seek voter approval before selling bonds.
However, McCall supports a second passage of the bill because he believes the plan has many positive attributes, including its provisions to create a state capital spending plan.
McCall spokesman Steven Greenberg said the comptroller wants to pass the current reform package, and then separately push for improvements in die state's borrowing practices. Without such a strategy, Greenberg said, the state will have to wait until 1997 to place a debt reform measure before voters.
Cuyler News Service contributed to this article.