Adjusted Executive
Appropriation Request Percent
2000-01 2001-02 Change Change
DEBT SERVICE
General Fund 248,500,000 240,000,000 (8,500,000) -3.42%
Fiduciary 30,000,000 40,000,000 10,000,000 33.33%
Debt Service Fund 4,082,650,000 4,239,950,000 157,300,000 3.85%
Internal Service Fund 205,000,000 210,000,000 5,000,000 2.44%
Capital Projects Fund - Other 950,000,000 775,000,000 (175,000,000) -18.42%
Total for Bill: 5,516,150,000 5,504,950,000 (11,200,000) -0.20%
General Fund
State Purposes Account
Payments of Rebates to
Federal Government 15,000,000 15,000,000 0 0.00%
Interest on Short Term
Notes and Bond
Anticipation Notes 8,500,000 0 (8,500,000) -100.00%
Redemption of Serial Bonds 225,000,000 225,000,000 0 0.00%
Fiduciary
School Capital Facilities Financing Reserve Fund
Principal and Interest on
Serial Bonds 30,000,000 40,000,000 10,000,000 33.33%
Debt Service Fund
Mental Health Services Fund
Mental Health Services Fund 360,000,000 355,000,000 (5,000,000) -1.39%
General Debt Service Fund
Principal and Interest on
Serial Bonds 703,000,000 715,000,000 12,000,000 1.71%
Financing Agreements 2,250,800,000 2,457,600,000 206,800,000 9.19%
Lease Purchase Payments 62,900,000 62,100,000 (800,000) -1.27%
Housing Debt Fund
Principal and Interest on
Serial Bonds 31,000,000 29,000,000 (2,000,000) -6.45%
Health Income Fund
Financing Agreements 37,250,000 37,250,000 0 0.00%
Financing Agreements 2,000,000 2,000,000 0 0.00%
Emergency Highway Reconditioning and Preservation Fund
Financing Agreements 32,000,000 32,000,000 0 0.00%
State University Dormitory Income Fund
Financing Agreements 53,500,000 55,000,000 1,500,000 2.80%
Emergency Highway Construction and Reconstruction Fund
Financing Agreements 32,000,000 32,000,000 0 0.00%
Local Government Assistance Tax Fund
Financing Agreements 518,200,000 463,000,000 (55,200,000) -10.65%
Internal Service Fund
Centralized Services Fund
Financing Agreements 205,000,000 210,000,000 5,000,000 2.44%
Capital Projects Fund - Other
Debt Reduction Reserve Fund
Debt Reduction 500,000,000 250,000,000 (250,000,000) -50.00%
Dedicated Highway and Bridge Trust Fund
Financing Agreements 450,000,000 525,000,000 75,000,000 16.67%
BUDGET HIGHLIGHTS
(Executive Budget: pp. 473-478)
The Executive recommends total Debt Service Budget appropriations of
$5,04,950,000 for State Fiscal Year (SFY) 2001-02, a net decrease of $11,200,000
over SFY 2000-01. This decrease is primarily attributed to reduction from the
Capital Projects Fund associated with the $250,000,000 the Executive plans to
use from the Debt Reduction Reserve Fund (DRRF) to provide increased pay-as-you-
go financing in support of the proposed Capital Plan. The magnitude of the
decrease associated with the reduction in the DRRF was somewhat compensated by
the increased debt service requirements for other debt service funds, which are
secured by dedicated revenue sources, debt service on New York's General
Obligation bonds, and the Statežs Certificate of Participation (COPs) program.
The Executive submits a separate appropriation bill for debt service. The
appropriations are not on a cash basis and reflect the maximum required debt
service payments for the State Fiscal Year, which could be significantly higher
than the actual cash amount necessary in specific instances. This is most common
for the variable rate debt and other short term debt instruments issued by the
Local Government Assistance Corporation (LGAC), the Housing Finance Agency, the
Urban Development Corporation, the Dormitory Authority and the Statežs General
Obligation bonds, which reflect a maximum annual rate of 18 percent.
The Executive recommends increasing the use of short-term debt as a percentage
of total State-supported debt. The share of state-supported debt comprised of
short-term debt is currently at 5.6 percent. This is projected to grow to 6.5
percent in SFY 2001-02, and increase to 10.7 percent by the year 2005-2006.
General Fund
The Executive recommends a total General Fund appropriation of $240,000,000 for
debt service, a decrease of $8,500,000 over SFY 2000-01. This total includes a
$15,000,000 contingent appropriation for the Statežs potential liability to
rebate arbitrage earnings on its General Obligation bonds to the Federal
government. It also includes a contingent appropriation of $225,000,000 for
redemption of General Obligation serial bonds should this become necessary to
maintain their federal tax exemption. These contingent appropriations are
recommended at the same level as SFY 2000-01. It is not anticipated that
disbursements will be necessary against these contingent appropriations.
The decrease in the General Fund appropriation is primarily due to a decrease in
debt service requirements for the general obligation notes in the amount of
$8,500,000.
Internal Service Funds
The Executive recommends a total appropriation of $210,000,000 for the
Centralized Services Funds, including an increase of $5,000,000 for payments on
the Statežs Certificates of Participation (COPs). This appropriation also
includes debt service payments on planned COPs for equipment to implement the
new Welfare Reform Computer Systems.
General Debt Service Fund
The Executive recommends a total appropriation of $4,239,950,000 for the General
Debt Service Fund, a net increase of $157,300,000 over SFY 2000-01. As
previously indicated, this increase reflects the issuance of bonds to support
the Executive's proposed Capital Plan. The primary credits responsible for the
increases are as follow:
--$138,000,000 in the Housing and Finance Agencyžs Service Contract Obligation
Revenue (SCOR) bonds to finance the State's housing programs;
--$235,000,000 in the Thruway Authorityžs Local Highway Improvement Program
for local highway improvement;
--$1,000,000,000 for the Dormitory Authority for the RESCUE School
construction program, SUNY, CUNY, and State Education Department's facilities,
the Albany Airport, the Library of the Blind, the Department of Health's
Axelrod Laboratory, pension obligation bonds, and State facilities including a
new parking garage and a new building for the Office of the State Comptroller
and the Common Retirement Fund, and for the Jobs 2000 University Facilities
Program;
--$165,000,000 for the Metropolitan Transportation Authority's (MTAžs) service
contract on bonds issued to finance transit and commuter rail projects;
--$375,000,000 for the Urban Development Corporationžs financing of
educational facilities, youth facilities, correctional facilities, Pine Barrens
land acquisition projects at University Technology Centers, High Technology
Research Facilities and Business Incubators, the Higher Education Applied
Technology Program (HEAT), and the Onondaga Convention Center;
--$175,000,000 in bonding for the Community Enhancement Facilities Assistance
Program (CEFAP);
--$59,000,000 for the Environment Facility Corporation for State Revolving
Fund SCOR bonds, the Jobs 2000 Pipeline for Jobs Program, and financing of the
Environment and Parks Programs;
--$50,000,000 in bonding for the Strategic Investment Program.
Included in the General Debt Service Fund is a $715,000,000 appropriation for
debt service on the Statežs general obligation bonds. This represents an
increase of $12,000,000 over SFY 2000-01. This increase is associated with the
increase debt service payments for the upcoming March sales of $172,000,000
variable rate General Obligation bonds.
Other Debt Service Funds
The Executive recommends total appropriations of $1,005,250,000 for all debt
service funds (other than the General Debt Service Fund), a net decrease of
$60,700,000 over SFY 2000-01.
Most of this decrease is attributed to a $55,200,000 reduction in the debt
service payments made from the Local Government Assistance Tax Fund. These
savings are derived from a decrease in the maximum appropriation for the Local
Government Assistance Corporationžs short-term debt instruments.
In addition to the Local Government Assistance Tax Fund decrease, the Executive
budget proposes a $5,000,000 decrease in debt service payments made from the
Mental Health Service Fund. These reduced payments are driven by the
refunding of Mental Health bonds issued by the Dormitory Authority to finance
improvements to the Statežs long term mental health facilities and the
development of community-based residences.
Capital Projects Fund
The Executive recommends an appropriation of $775,000,000 in the Capital
Projects Fund. $250,000,000 of that appropriation will be set aside in the Debt
Reduction Reserve Fund to provide increased pay-as-you-go financing to
supplement the construction levels of the Department of Transportationžs (DOT)
Highway and Bridge Construction Program. The remaining $525,000,000 will be
deposited in the Dedicated Highway and Bridge Trust Fund, reflecting an increase
of $75,000,000 over 2000-01. This increase reflects the Executivežs proposed
capital program for transportation. Disbursements from the fund are used to make
payments to the Thruway Authority for debt service on its Dedicated Highway and
Bridge Trust Fund bonds.
Fiduciary Fund
The Executive recommends an appropriation of $40,000,000 in the School Capital
Facilities Financing Reserve Fund, which is $10,000,000 higher than the SFY
2000-01 appropriation. These funds are used to pay debt service on bonds
issued by the Dormitory Authority on behalf of certain Special Act School
Districts, pursuant to legislation enacted in 1988.
Debt Reform
The Executive proposes a Constitutional Debt Reform package following the
enactment of the Debt Reform Act of 2000. This debt reform plan would do the
following:
--Constitutionally mandate the State-supported debt outstanding and debt
service cap now imposed by the Debt Reform Act of 2000;
--Eliminate all State-supported public authority debt;
--Authorize a limited amount of revenue-backed debt;
--Require that at least one-half of the debt be approved by the voters;
--Authorize multiple general obligation (G.O.) bond act proposals;
The Executive further proposes a new žstatutory revenue debt structurež that
would pledge 25 percent of the broad-based personal income tax receipts to
žguaranteež the State will satisfy the debt service obligations due on all new
revenue-backed bonds.