“New York is shouldering a huge debt load issued by public entities operating in the shadows that voters never approved,” says State Comptroller Tom DiNapoli.

New York State Comptroller Tom DiNapoli is calling for fiscal and procurement reforms after a report released Thursday said the state's public authorities have accumulated $267 billion in debt.

DiNapoli is proposing a ban on backdoor spending by public authorities and requiring legislative appropriation of all authority spending on behalf of the state, which would be subject to pre-audit review by the Office of the State Comptroller. New York’s 1,192 public authorities as of September 2016 include 324 state-level authorities and subsidiaries along with 860 local authorities and eight that are interstate or international, according to DiNapoli. He said the state is relying more on public authorities to undertake most borrowing and bypassing a state constitutional provision that restricts the issuance of general obligation debt without voter approval.

“New York’s public authorities play an increasingly influential role in government yet they operate outside the traditional checks and balances that apply to state agencies,” said DiNapoli in a statement. “Some of these entities are repeatedly used in a way that circumvents borrowing limits and oversight. As a result, New York is shouldering a huge debt load issued by public entities operating in the shadows that voters never approved.”

DiNapoli proposed last May a ban on “backdoor borrowing” and a voter approval requirement for all state debt with “limited exceptions” after a report released by his office showed state-supported debt outstanding projected to rise 19.6% to $60.8 billion in fiscal 2021. The comptroller said Thursday that backdoor borrowing represents 22% of total public authority debt.

DiNapoli’s new report said state and local authorities spent a combined $66.8 billion in the most recent fiscal years reported. He noted that 91% of state public authority debt outstanding issued for state-purposes was through the Empire State Development Corp., the Dormitory Authority of the State of New York and the New York State Thruway Authority.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.