This year’s election ballot includes the much-debated Green Bonds Act of 2022.
As a $3 billion measure originally proposed by former Gov. Andrew Cuomo in 2019, the Environmental Bonds Act was postponed due to the COVID-19 pandemic, and states could not afford to enforce the Bond Act at the time. I was concerned.
Now that has increased to a $4.2 billion proposal. If approved, the proposal would allow the state to borrow up to $4.2 billion to fund the following capital projects: Remediation and Flood Risk Mitigation (at least $1.1 billion), Land Conservation of Vacant Lot. and recreation (up to $650 million) climate change mitigation (up to $1.5 billion), improved water quality and resilient infrastructure (at least $650 million).
In theory, Clean Water, Clean Air and Green Jobs Environmental Bonds are a good idea. Studies show states will have to pay billions of dollars to transition away from fossil fuels. And the occasional bond environment project is a good use of state funds.
The problem is New York State itself. The state would save money if the state’s labor requirements did not inflate the cost of many projects. The Empire Center for New York State Policy recently wrote that it could account for more than 10% of the revenues of the bond law, with voter approval of a significant project giving his union a tenth of that money. No more wasting money on related goodies and donations. The Empire Center also points out another important issue with the proposal. State debt is projected to skyrocket over the next five years. The State Budget Office projects that over the next five years, state-backed outstanding debt will rise from just under $62 billion today to nearly $88 billion in fiscal 2027. The state and country are about to face a recession likely to affect Wall Street, which finances much of New York’s annual spending.
Worse still, we frankly don’t believe our current state leaders will spend their money wisely if voters approve. It made it clear that it could not be stolen or traced, or that lucrative contracts were not freely given to friends of elected officials or campaign donors.
In our opinion, it is not the right time to add another $4.2 billion of debt to New York’s budget, given the likelihood of a recession and the inability to effectively execute existing large-scale programs.