New York State Comptroller Edward V. Regan announced yesterday he will actively campaign against Gov. Mario M. Cuomo's $800 million jobs-creating bond act.
The comptroller said he supports the act in principle, but will fight it in order to force the governor and the legislature to accept his proposal for a limit on state borrowing. A spokesman for the governor dismissed Mr. Regan's announcement as "nothing more than a public relations stunts."
Mr. Regan's announcement marks the second time the Republican comptroller and Democratic governor have been publicly at odds over the $800 million bonding act.
Economic aides to Gov. Cuomo say the "Jobs for the New, New York Bond Act," appearing on the November ballot for voter approval, will ultimately create 125,000 jobs by the year 2000 through a series of public works projects.
Mr. Regan also announced during the Albany press conference that he has accepted an invitation by the Manhattan Institute, a New York-based think tank, to meet Gov. Cuomo in a debate on the act and the governor's fiscal policy.
A spokesman for Gov. Cuomo said the governor will not accept because Mr. Regan has said he accepts "the merits" of the bond act.
During the press conference, the comptroller said taxpayers should press lawmakers and the governor to pass a bill supported by Mr. Regan that has been introduced to the Legislature during the last three legislative sessions.
This measure, if passed as is, would place certain limits on the sale of state appropriation debt and other debt issued by the state that bypasses the voter referendum clause in the state constitution. Voters must approve the sale of general obligation debt.
Mr. Regan said that in theory he supports the bond act, which he termed "a laudable goal" during the press conference. But, he said, New York's finances will continue to suffer without reform of the state's use of appropriated debt or securities sold by legislative approval.
Each year, the Legislature must vote to approve the payment of interest and principal on these securities, which unlike general obligation bonds are not backed by the full credit of the state.
"This November, we have a chance to bring about fundamental changes in the way the state goes about borrowing money," Mr. Regan said. "With reform, the jobs bond act won't be fiscally harmful. I can support it, though others will want to independently assess the benefits of its economic impact."
In recent years, the state's reliance on appropriated debt has overshadowed its issuance of general obligation bonds, which are backed by the state's pledge of payment. Moody's Investors Service said the state has issued $17.5 billion in outstanding appropriated debt, compared with $5.8 billion of outstanding GOs.
Charles Porcari, a spokesman for the governor, said Gov. Cuomo supports the concept of some limit to the state's use of appropriated debt. But he said Mr. Regan's method for drawing attention to the problem was ill-conceived. "The comptroller knows that the bond act will create 125,000 jobs and that it will create more than enough revenue to cover debt service on the bonds," Mr. Porcari said.
Aides to the governor say that jobs created by the bond act will lead to $3.1 billion in extra state revenue, while debt service on the bonds will amount to $1.7 billion.
First proposed by the governor earlier this year, the sale of bonds will immediately create 25,000 construction jobs through a state-financed effort to improve New York's crumbling infrastructure. It is hoped these jobs will then spark the creation of other forms of employment throughout the state's economy.