Gov. Pataki's $1.75 billion Clean Water/Clean Air Bond, which will be voted on in a referendum in November, proposes to preserve open spaces, clean up industrial sites and improve waste-water treatment. I support these projects but oppose borrowing to finance the work.
The bond act would add billions to New York's already staggering debt. Dollar for dollar, New York has significantly more debt than any other state.
The governor and his supporters say that the state can afford this bond act because the debt level is declining. That is simply not true. The Wall Street credit-rating agencies say that New York's overall debt is accelerating. As a result, New York remains tied with Louisiana for the worst credit rating in the nation.
Under the current bond act proposal, the new debt would be even more burdensome. The interest payments alone would be more than $1.1 billion. Our children's children will be paying off this debt 40 years from now.
There is a better way to fund environmental work -- on a pay-as-you-go basis.
This bond act -- because its payments are spread out over many years -- would generate only about $100 million annually for environmental work. That amount could be found in the yearly budget without adding to the state debt. Indeed, the pay-as-you-go approach is not only preferable, it is actually quite feasible. Here's how:
The governor has set aside half of the revenues from the state's real property transfer tax -- approximately $100 million annually -- to pay for debt-service payments on the bond act. The other half of the revenues goes to the state's general fund.
Why not dedicate the entire proceeds of this tax ($200 million) to environmental purposes? That would double the amount provided annually by the bond act. It would accomplish all of the goals of the bond act, including leverage federal cleanup dollars, and do so without the burdensome debt. This could be done with legislation creating a "locked box" for environmental work.
Virtually every environmentalist acknowledges that this would be a better approach, but they question the ability of the state to make that commitment. But if we are prepared to set aside money for a huge debt payment, we surely can set aside the same money for continuing environmental work.
Voters should say "no" to this bond act proposal. They should instead urge their legislators to develop a responsible pay-as-you-go approach that could save billions of dollars in interest payments and accomplish even more for the environment.
A cleaner state should not depend on a huge new debt.
Michael J. Bragman Majority Leader
New York State Assembly