Should the Indebted Support a State Constitutional Amendment to Restrict Public Authority Borrowing?

Abstract

Since the early 1900s, in the absence of voter approval or often knowledge, the state’s public authorities have given rise to more than 95 percent of the state’s aggregate debt and assumed responsibility for 85 percent of our infrastructure. They serve, many have suggested, as a shadow government. Good government organizations have increasingly urged adoption of a state constitutional amendment to place limits on the ability of the public authorities to borrow in the absence of voter approval. Others respond that fiscal limitations on entities responsible for sustaining the state’s solvency would be ill conceived and could catastrophically impair the state’s access to the capital markets. This chapter examines the issue.