Year-to-Year Change

The Executive proposes to increase All Funds appropriations for State debt service by $238,800,000 over those enacted for the State Fiscal Year 2000-01. Just under half of the proposed increase is attributed to new debt service on the State?s Special Contractual Obligation bonds issued by public authorities on behalf of New York State. The remaining increase can be attributed to higher projected debt service requirements for Dedicated Highway and Bridge Trust Fund bonds, Dormitory Authority bonds issued for capital projects at mental health facilities, Dormitory Authority bonds issued for State University of New York capital projects.

Legislative Proposals

Refunding of various bonds

($10,000,000)   DS/DBT

The Assembly anticipates $10 million in total General Fund debt service savings associated with the refunding of various high interest rates New York State bonds currently outstanding.

Re-estimate of Special Contractual Obligation bonds

($5,748,900)   DS/DBT

The State's public authorities are scheduled to issue a number of special contractual obligation bonds on behalf of the State, each having a debt service impact during SFY 2001-2002. The Assembly?s total cash savings of $14.5 million include $5.7 million in fixed-rate debt service savings, and the remainder is attributable to variable rate debt service. Debt service savings are adjusted for actual sales which occurred during the month of February, and re-estimates of bonds sales scheduled for March and later in the fiscal year are based on current bond yields, adjusted to account for historical trends.

Re-estimate of COPs

($4,174,000)   DS/INT

The Executive proposes three new Certificate of Participation (COPs) issuances, each having a debt service impact during SFY 2001-2002. The first sale of $56,375,000 is scheduled for February 2001 and has a debt service impact of $15.5 million. The second sale of $167,075,000 is scheduled for April 2001 and has a debt service impact of $60.4 million, and the third sale of $140,425,000 scheduled for December 2001 has debt service impact of $22.9 million. The Assembly debt service re-estimate for these three sales results in $11.9 million in savings, which were offset by an increase in COPs issuance. A net saving of $4,174,000 is from fixed-rate re-estimation and the remainder is attributable to variable rate issuance.

Additional COPs

$3,400,000   DS/INT

The Assembly recommends an additional $30.5 million in COPs to be sold on October 2001, with a SFY 2001-02 debt service impact of $3.4 million. These COPs will provide necessary financing for the Port of Albany, the office of Temporary Disability Assistance (OTDA), the Office of Alcohol and Substance Abuse Services (OASAS), the Department of Health (DOH), and the Board of Elections.

Re-estimate of Dedicated Highway Bond

($15,264,000)   DS/CAP

The Thruway Authority is scheduled to issue Dedicated Highway and Bridge Trust Fund bonds in February and June, each having a debt service impact during SFY 2001-2002. The Assembly?s total cash savings of $15.26 million includes $3.3 million related to re-estimate of the fixed-rate debt service associated with the February sale, $0.8 million in debt service savings associated with the June fixed rate sale, and an additional $11.9 million in debt service savings associated with the June variable rate sale.

Re-estimate of Mental Health Facility Improvement bonds

($444,200)   DS/DBT

The Dormitory Authority is scheduled to issue Mental Health Facilities Improvement bonds in August with a debt service impact during SFY 2001-2002. The Assembly's total cash savings of $444,290 are from the re-estimation of fixed-rate debt service based on current bond market conditions.

Re-estimate of Local Government Assistance Corporation bonds

($4,568,500)   DS/DBT

The Local Government Assistance Corporation (LGAC) currently has approximately $913.7 million in variable rate bonds outstanding. The Assembly?s cash savings of $4,568,500 is comprised of a re-estimate of interest rate cost based on current market, adjusted to account for the historical trend of LGAC?s variable interest rates.

Re-estimate of General Obligation bonds

($5,173,100)   DS/DBT

New York State is scheduled to issue General Obligation bonds in March and June, each having a debt service impact during SFY 2001-2002. The Assembly's total cash savings of $5.2 million is comprised of a re-estimate of the fixed-rate debt service of $2.0 million associated with the March sale, $316,780 associated with the June sale and the remainder is associated with re-estimate of outstanding variable rate debt.

Increased Issuance of Short Term Variable Rate Bonds

($1,960,900)   DS/DBT

The Governor proposes to increase the State portfolio of variable rate debt from 5.6 percent to 6.5 percent. The Assembly further increases the short-term variable debt portion of the portfolio by an additional $1,149.22 million thus raising the variable rate share from 6.5 percent to 9.50 percent for SFY 2001-02 savings of $16.69 million. However, these savings are offset by an additional debt service cost of $14.3 million associated with the Assembly recommended $311.2 million in new capital projects to be financed with variable rate bonds.

Additional Capital Projects

$14,300,000   DS/DBT

The Assembly recommends an increase of $311.2 million in capital projects spending with an associated SFY 2001-02 debt service cost of $14.3 million. These monies will provide necessary financing in areas such as Economic Development, Housing, the Office of Children and Family Services (OCFS), Higher Education, Transportation, and State Education Department.

Debt Reform Proposal SFY 2001-2002

The Assembly Capital Plan for SFY 2001-02 is well within the caps established pursuant to the Debt Reform Act of 2000, which provide for a maximum statutory cap on all-state supported debts of 4% of the State personal income and a statutory debt service cap of 5 percent of All State Funds receipts.