Today’s Crisis:
There are about 7.1 million households in the state, which means for every $1 billion the state owes, each household technically owes $141. Yours will be on the hook for $897 of this fiscal year’s budgeted deficit, and for $3,695 of the deficit projected for the next three years. (Over the next three years, each city household will owe $4,175 of local deficit.) That doesn’t include what we already owe. The state’s debt service comes to $435 per household each year—plus it costs each household $1,486 annually to service the city’s debt.
How Does It Compare to the Seventies?
In 1975 the city was $12 billion in debt ($49 billion in today’s dollars) and ran a deficit of $1 billion ($4.1 billion today). Today we’re $52.3 billion in debt, but in the worst year of the city’s five-year forecast (2011) we’ll be only 8 percent over budget. In 1975 we were a whopping 19 percent over budget. Even more important, in 1975 the city couldn’t borrow— it didn’t even have a credit rating. In 2006 New York got its highest rating ever from Standard & Poor’s, an A+.
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