Citizens Budget Commission (CBC) President Andrew S. Rein sent the following letter on behalf of the CBC: 

Dear Senate Majority Leader Stewart-Cousins and Assembly Speaker Heastie:

The Citizens Budget Commission urges you to reject the proposal to increase the New York City Transitional Finance Authority’s (TFA) borrowing capacity that is outside of the City’s constitutional debt limit. At best, approving this increase is premature; under current projections, the City expects to have $12.1 billion in debt capacity at the end of fiscal year 2026. If additional capacity is needed in the future—based on solid planning that identifies and prioritizes needs, and efficient management of capital projects—there will be sufficient time to consider the wisdom of an increase.

Not only is capacity available for the next four years, it is likely to be higher than currently forecast. First, there is a reasonable chance property values grow more quickly than the City's cautious estimate, which would lead to more debt capacity.

Second, the current projection likely overstates the City’s capital commitments from fiscal year 2022 through 2026. It assumes the City commits its full 5-year capital plan of $95 billion, when the City generally commits only a portion of the capital plan. In fact, the City includes a “reserve for unattained commitments” that accounts for lower than planned commitments for projects that then are rolled to future years. Mayor Eric Adams has yet to propose an increase in the City’s capital plan that would require issuing debt that would exceed the current limit.

Increasing debt capacity now is not only premature, but also avoids addressing real affordability, planning and execution issues. Prior to seeking an increase in the debt limit, the City should improve its capital planning, prioritization, and execution to ensure that New Yorkers are being provided with cost-effective, targeted capital investments serving their City’s long-run needs.

CBC urges the State’s leaders not to increase the debt limit now. When the City has undertaken comprehensive efforts to improve its capital planning and execution, and identifies needs that may be appropriately met with higher debt levels, this issue will be appropriate to reconsider. We are available to discuss these issues at your convenience.

Sincerely,                                                                                                                  

Andrew S. Rein
President
Citizens Budget Commission

cc: The Honorable Kathy Hochul, Governor
The Honorable Liz Krueger, NYS Senate Finance Committee Chair
The Honorable Helene Weinstein, NYS Assembly Ways and Means Committee Chair
Robert Mujica, NYS Budget Director
David Friedfel, NYS Senate Majority Finance Committee Secretary
Blake Washington, NYS Assembly Ways and Means Committee Secretary