New York is laying off teachers, health care workers, and other vital servicers in record numbers. Yet, we remain both deep in debt and beholden to the the banks for money that we have to pay 5% or more to borrow.
But, the fact is, there is far, far more money than needed to close the budget gap and pay for vital Government services already in State Reserves. According to the Comprehensive Annual Financial Report (CAFR), 2009:
The report expresses concern in their introduction of increasing budget deficits ($8 billion for 2009) and rising debt-servicing costs ($5.3 billion in 2009 projected to $7.8 billion in 2014).
However, in the same report, there are pension accounts, worth $111 billion (42), with current member contributions at $2.9 billion (43) and benefits paid at $7.4 billion, with a whopping $99 million administration cost (none of which goes to the citizens of NY State) (43). Types of investments for this $111 billion are listed on page 84.
So, the state is asking to retain $111 billion of public assets instead of paying "New York’s $9 billion budget gap" (this figure according to the Times). It’s important to understand that any state has literally thousands of various government CAFRs with investments like this. What’s required is comprehensive and independent accounting and independent cost-benefit analysis of how much money the public has handed-over to all levels of government and how to maximize public benefit.
We didn't elect these people to take our money and "invest" it for us; government is not a for-profit corporation. It is a massive lie of omission to not reconsider these funds for other uses, including a state-owned public bank, based on the highly successful model in North Dakota, which has had a State Bank since 1919 and was the only state in the union to run a budget surplus during the 2008-2009 meltdown.
The primary attack is that pension funds are for pensions and illegal to touch. But, keep in mind that this money is already being invested, and sometimes lost, in risky markets by the advisers New York currently pays nearly $100 million to manage their funds.
None of this money is invested specifically in community based New York businesses or needs.
In North Dakota, by contrast, ALL state revenues are invested into State needs - in agriculture, in housing, in student loans etc. - many of which are significantly less risky than the ventures Wall Street money managers currently "invest" in.
Solution: Set up a New York State Bank, use it to make responsible loans, enable the fractional reserve system to create credit (rather than having private banks create it for us and charge us interest) that will create even more money, and pay off New York's obligations with the profits. Why should we pay $99 million to unconnected parties whose main interest is collecting fees, not benefiting New York?
*** Update *** There is now a bill under Active consideration - A6110 - sponsored by Assembly member Sandy Galef, to consider a State Bank under the North Dakota model. Read more about it here: http://assembly.state.ny.us/leg/?bn=A06110
There is also a Senate Bill - S03260 - supporting a State Bank study commission, sponsored by State Senator James Sanders: http://assembly.state.ny.us/leg/?term=2015&bn=S03260
We urge support of this vital measure for all New Yorkers.