View Capital Debt and Obligations report for FY 2007

Comptroller William C. Thompson, Jr. today issued a Charter-mandated Capital Debt and Obligations report indicating that the City's capital budget requirements, which are funded primarily with debt, continue to result in increasing levels of indebtedness for the City. The resulting debt service costs continue to place a significant burden on the City's operating budget.

“New York City leads a sample of large U.S. cities in debt burden per capita by a margin of 2.5 to one,” Thompson stated. “While it is critical for the City to maintain its complex, varied and aging infrastructure, the capital program must be carefully monitored in light of the City's growing rate of debt.”

Section 232 of the City Charter requires the Comptroller to report on the amount of debt the City may responsibly incur for capital projects during the current fiscal year and each of the three succeeding fiscal years. Debt is issued by the City, or on behalf of the City, through a number of different vehicles, including General Obligation (GO) debt, the New York City Transitional Finance Authority (NYCTFA) and TSASC, Inc.

The City uses capital bond proceeds for the construction and rehabilitation of schools, roads and bridges, correctional and court facilities, sanitation garages, parks, cultural facilities, public buildings and housing and urban development initiatives. Bond proceeds also are used for financing shorter-lived capital items such as comprehensive computer systems.

Debt per capita - which is the share of the burden on each of the City's eight million citizens - has escalated to $6,801 in FY 2006 from $2,490 in FY 1990, an increase of 173 percent. Over the same period, the cumulative growth in debt per capita exceeded the rate of inflation by 112 percentage points and the growth in City tax revenues by 45 percentage points.

The City's general debt limit, as provided in the New York State Constitution, is 10 percent of the five-year rolling average of the full value of taxable City real property. The City's FY 2007 general debt-incurring power of $53.34 billion is projected to rise to $59.8 billion in FY 2008, $63.43 billion in FY 2009 and $65.15 billion in FY 2010.

Additionally, the debt-incurring capacity of NYCTFA and TSASC, Inc. totals $17.3 billion of which $12.8 billion has been utilized to finance the City's capital program and $2.0 billion for recovery bonds. After adjusting for the benefit of the NYCTFA and TSASC debt-incurring power, the City was below its general debt limit by $13.62 billion on July 1, 2006 and is projected to have remaining debt-incurring capacity of $15.79 billion on July 1, 2007, $14.17 billion on July 1, 2008, and $12.11 billion on July 1, 2009.