View Capital Debt and Obligations Report

New York City 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 to the City. The resulting debt service costs continue to place a significant burden on the City's operating budget.

“While maintenance of our infrastructure and the need to invest in educational facilities are critical, the budgetary impact of our capital program must be carefully monitored and future projects must be prioritized in light of projected budget gaps,” Thompson said.

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 $6,223 in FY 2004 from $2,490 in FY 1990, an increase of 150 percent. Over the same period, the cumulative growth in debt per capita exceeded the rate of inflation by 100 percentage points and the growth in City tax revenues by 63 percentage points. Based on an analysis of financial statements issued by other jurisdictions, New York City leads a sample of large U.S. cities in the size of debt burden per capita by a margin of 2.5 to one.

The City's general debt limit, as provided in the New York State Constitution, is ten percent of the five-year rolling average of the full value of taxable City real property. The City's FY 2005 general debt-incurring power of $43.12 billion is projected to rise to $45.47 billion in FY 2006, $47.31 billion in FY 2007 and $48.62 billion in FY 2008.

Over the next three fiscal years, the City expects to commit additional capital contracts totaling $15.44 billion. The City also anticipates retiring $5.39 billion of GO debt in this period, leaving the City with remaining debt-incurring capacity, within the general debt limit, of $4.69 billion by the beginning of FY 2008.

Additionally, the debt-incurring capacity of NYCTFA and TSASC, Inc. totals $15.30 billion and already has provided approximately $14.80 billion in resources to finance the City's capital program. After adjusting for the benefit of the NYCTFA and TSASC debt-incurring power, the City was below its general debt limit by $9.28 billion on July 1, 2004 and is projected to have remaining debt-incurring capacity of $7.61 billion on July 1, 2005 , $6.31 billion on July 1, 2006 , and $4.73 billion on July 1, 2007 .

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