Hevesi says Pataki pushing billions of new debt in final months

A board that oversees borrowing to fund state construction and economic development projects is "rushing through" major decisions in the last months of Republican Gov. George Pataki's administration, saddling taxpayers with billions of dollars in debt, state Comptroller Alan Hevesi said Tuesday.

The Public Authorities Control Board approved $4.7 billion in projects in October, including $3.7 billion in new state debt. The board was slated to vote on another $6.7 billion this month, of which $3.9 billion is new. Another $1.7 billion will go to refinance state-issued bonds. Billions of dollars more are expected to be voted on in December.

"New York State is already suffering under huge amounts of debt, and now in the last days of the current administration, there is a rush to push through billions of dollars of projects that will load the state with billions more in debt, in many cases without getting a proper review," Hevesi said.

The PACB had approved an average of less than $500 million in projects per meeting for the past year, Hevesi said. The board includes voting members representing Pataki, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno. Votes must be unanimous for a project to win approval.

Hevesi sent a letter last week to Bruno, Silver and board Chairman John Cape expressing his concerns. Cape is Pataki's budget director.

Pataki spokesman Michael Marr said the volume of projects coming up for approval in recent months was the result of delays caused by Hevesi and Silver, both Democrats. Marr cited the canceled vote last month on a $900 million project to turn Manhattan's main post office into a massive new rail gateway to New Jersey. Silver and Hevesi questioned the adequacy of financing for the project.

"When it comes to economic development in New York, history has shown that there are always excuses not to move forward and both Comptroller Hevesi and Speaker Silver have sought to grasp any excuse they can all for the sake of delay," Marr said.

Silver's office did not immediately respond for comment.

Bruno spokesman Mark Hansen declined comment, as did governor-elect Eliot Spitzer's spokeswoman, Christine Anderson.

Last month, the independent Citizens Budget Commission said the state government's debt this year will reach a record $49.7 billion, or $3,515 for every adult New Yorker. That compares to $2,060 per person in California and $707 in Texas. Total state-funded debt is projected to increase to nearly $65 billion by 2010-2011, the comptroller's office said.

The comptroller said Spitzer should also be given an opportunity to review the projects because it may be years before many even start.

Hevesi said the projects may be worth doing, but after being rushed through, "it is impossible to know if they are as good as they can be."

Hevesi also noted that market conditions are not favorable for all of the bond refinancing being authorized. For example, the PACB has been asked to authorize the Dormitory Authority to refinance more than $700 million in personal income tax bonds, but under current market conditions only about $65 million of the bonds can be refinanced and produce actual savings.