The Cuomo administration is about to begin running up charges on that $11 billion credit card the Legislature handed the governor in the new budget.

Under the budget’s Education, Labor and Family Assistance bill, Cuomo is authorized to borrow up to $11 billion this year in the form of up to $8 billion in bond anticipation notes (BANs) and $3 billion from “line of credit facilities and other similar revolving financing arrangements.”


This is an installment in a special series of #NYCoronavirus chronicles by Empire Center analysts, focused on New York’s state and local policy response to the Coronavirus pandemic.


The board of every governor’s favorite bond bank, the Dormitory Authority of the State of New York (DASNY), yesterday approved two resolutions stemming from the budget borrowing language.

The first resolution authorized DASNY to issue up to $1 billion in BANs backed by a pledge of personal income tax receipts “to reimburse itself or the State, from the proceeds of such bonds, for all or a portion of the Expenditures made on or after February 8, 2020.” Additional PIT-backed BAN issuances will surely follow.

The second authorizes DASNY to “enter into commitments with financial institutions for the establishment of one or more Line of Credit Facilities” totaling up to $3 billion.

And in a market flooded with public debt, who will loan the state billions of dollars? Expect DASNY to turn first to the Federal Reserve and its newly authorized $500 billion Municipal Liquidity Facility, which was authorized by the $2 trillion CARES Act stimulus bill.

Both forms of borrowing can be renewed or reissued for up to two years and ultimately converted into long-term at the discretion of Cuomo’s budget director. This, in turn, would open the door to a form of long-term deficit borrowing to cover operating expenses, which is generally regarded as the ultimate fiscal sin.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

One of New York’s Biggest Medicaid Contractors Is Quietly Acquiring a Competitor

As state lawmakers debate the future of Medicaid home care, one of the program's biggest contractors is quietly doubling its market share by buying a competitor. In December, , the Read More

The Union Gave Them the Wrong Data. The Pols Cited It Anyway.

The episode shows the extent to which New York elected officials fail to question the state’s public employee unions—or look at data themselves. Read More

New York’s Home Health Workforce Jumped by 12 Percent in One Year

New York's home health workforce has continued its pattern of extraordinary growth, increasing by 62,000 jobs or 12 percent in a single year, according to newly released data from the U.S. Bureau of Labor Statistics.  Read More

While New York’s Medicaid Budget Soared, Public Health Funding Languished

Four years after a devastating pandemic, the state has made no major investment to repair or improve its public health defenses. While funding for Medicaid over the past four years Read More

Unions are pressing bogus arguments for blowing up NY’s public pension debts

New York's public employee unions are arguing, without evidence, that state lawmakers need to retroactively sweeten the pensions of workers who have been on the job for more than a decade. In fact, state and federal data show why state lawmakers shouldn't. Read More

A Medicaid Grant Recipient Sponsors a Pro-Hochul Publicity Campaign

While much of the health-care industry is attacking Governor Hochul's Medicaid budget, at least one organization is rallying to her side: Somos Community Care, a politically active medical group in the Bronx that recently r Read More

New Jersey’s Pandemic Report Shines Harsh Light on a New York Scandal

A recently published independent review of New Jersey's pandemic response holds lessons for New York on at least two levels. First, it marked the only serious attempt by any state t Read More

Senate, Assembly Budget Plans Include $4B Pension Giveaway

A little-noticed provision in lawmakers’ budget proposals would also be the most costly: their proposal to change state retirement rules would slam New York taxpayers with more than $4 billion in new debt, and immediately drive up pension costs, by retroactively sweetening the pension benefits of public employees. Read More