Lovett: New York has its own debt cliff it's about to roll off

Lovett: New York has its own debt cliff it's about to roll off

Theodorakis, Andrew/Theodorakis, Andrew

State Controller Tom Dinapoli's painting a scary picture for New York, saying the Big Apple is fast approaching its own fiscal cliff stemming from a massive debt cap.

ALBANY â€" Debt-ridden New York is heading toward a fiscal cliff of its own, state Controller Thomas DiNapoli warns.

New York is fast approaching its debt cap and will have difficulty finding money to cover critical state-funded building and maintenance projects for the MTA, public universities, and bridges and roads, DiNapoli said Monday.

“New York’s past borrowing is limiting our future options,” DiNapoli said. “We spend billions each year to repay existing debt, so fewer resources are available for more pressing needs.”

The state’s debt capacity dropped from $ 9.2 billion in 2008-09 to a projected $ 509 million in the coming fiscal year starting in April, DiNapoli found.

The drop is a result of “significant” new borrowing since the debt cap was enacted in 2000 and a decline in personal income growth, his new report shows.

New York’s $ 63.3 billion in state-funded debt is second to California’s $ 96.4 billion and 80% higher than third-place New Jersey.

The state hurt itself by too often borrowing to pay for projects rather than paying as it went, he said.

And a good chunk of borrowing was designed to cover operating expenses, not capital projects.

State debt jumped 62.2% the past decade and now averages $ 3,253 per state resident, nearly three times the national median.

Debt repayment in 2011-12 totaled $ 6.8 billion, with recent growth outpacing that of education and Medicaid.

DiNapoli praised Gov. Cuomo and the Legislature for taking actions to rein in out-of-control borrowing.

But he said other reforms are needed, including a constitutional amendment requiring that all new debt be approved by the Legislature and voters.

Nearly 95% of state borrowing over the past decade has been through public authorities that bypass the Legislature and voters.

E.J. McMahon of the Empire Center for New York State Policy praised DiNapoli’s “basic common-sense reforms” and urged Cuomo to support them.

“This is a clarion call for long overdue debt reform,” he said.

Cuomo budget spokesman Morris Peters said there will be no need to raise the debt cap as changes already enacted have slowed the rate of annual capital spending growth to just 2%.

“By targeting investment and exercising restraint, the state is generating additional capacity under the debt limit for critical infrastructure investment,” Peters said.

With Glenn Blain

klovett@nydailynews.com