Pyrrhic Victory

Mayor Bloomberg may be able to wriggle out of the obligations that New York City shouldered in the 1970s by laying them off on the rest of the state. But even if he wins, in the end it will be a pyrrhic victory. His good name will forever be associated not with making hard decisions, upholding the common good, and respecting the constitution, but with legal shenanigans. The next generations of citizens, from Montauk to Niagara Falls, will resentfully pay back the Bloomberg bonds, knowing them to be a debt shirked by New York City through tortured legal reasoning and shoddy political expediency.This deal, hatched in June by the Legislature despite Governor Pataki’s veto, calls for the state to lay out $5.1 billion over the next 30 years so that the city can save a mere $2.5 billion over the next five. Remember that the city incurred the debt in the first place through financial mismanagement that brought it to the brink of bankruptcy. And now, a scant five years from making up for that mistake, it embarks on another.Article 7, Section 11, of the state constitution reads plain enough, declaring that no attempt by the state to borrow money for more than a year becomes valid “until it shall, at a general election, have been submitted to the people, and have received a majority of all the votes cast for and against it.” Yet Mr. Bloomberg would issue bonds under the city’s name, on the promise of drawing annual allotments of $170 million from the state treasury through 2034, without any imprimatur from the voters and in defiance of strong opposition from both Mr. Pataki and Comptroller Hevesi. We note with pleasure that former Comptroller McCall — who was Mr. Pataki’s opponent in last year’s election — is his ally on this point.We recognize, alas, that our forefathers’ wise restraints on borrowing have been honored of late mainly in the breech, fertilizing the soil for weeds such as this one. We seem to recall, as if from a nightmare, a previous occupant of the governor’s office “selling” prisons and sections of highway to state authorities as a way of papering over budget deficits. Earlier this year, Albany borrowed its way out of a deficit by “securitizing” proceeds of a legal settlement extorted from cigarette manufacturers, accepting $4.2 billion in lieu of almost $6 billion it would otherwise have received over the next 12 years. But Mr. Pataki, in pressing a suit against this latest misbegotten deal, is right to stand on the letter of the law, no matter how shaky we have let that perch become. Perhaps he can put some meaning back into the state’s foundational document.Indeed, the best thing for the city and the state would be for the governor to do everything in his power, within the courts and without, to quash these bonds. The fact that judges may be willing to hold their noses does not make the Legislature’s action any less foul. Whether given a veneer of legality or not, it still asks the citizens of New York State to pay $1.20 for every 50 cents that Mr. Bloomberg hoards. That Mr. Pataki has offered compromises — of which we are not overly fond — to stretch the debt 10 years rather than 30, and thereby save $1.8 billion, seems not to have moved the mayor at all. To the contrary, Mr. Bloomberg seems much less flexible here than he was, say, when it came to keeping his campaign pledge not to raise taxes.Let’s hope Mr. Pataki and the taxpayers win this one over Mr. Bloomberg and the borrowers.

Pyrrhic Victory

Pyrrhic Victory

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