Cuomo "smart-schools" bond plan faces doubts

New York State Governor Andrew Cuomo at the

New York State Governor Andrew Cuomo at the Capital on July 18, 2013. (Credit: Newsday / J. Conrad Williams, Jr.)

Dan Janison

Melville. N.Y. Tuesday January 26, 2010. Daniel Janison, Dan Janison

Dan Janison has been a reporter at Newsday for 10

bio | email

The other day, a Democratic state lawmaker who is nobody's model of an austerity hawk expressed qualms about Gov. Andrew M. Cuomo's proposed $2 billion "smart-schools" bond issue.

The New York City-based elected official, who requested anonymity, said the proposal's goal -- equipping less-wealthy public schools with laptops, tablets and high-speed broadband -- looked like a bad fit for borrowing.

Bond issues are supposed to be for capital projects. The traditional model is a bridge or highway -- a single physical improvement that lasts at least for the duration of the 25-year or 30-year borrowing, and often much longer.


PHOTOS: Cuomo through the years | Notable photos of Cuomo
DATA: Who's funding Cuomo's campaign?


How many years do laptop or desktop computers really last? Can they be deemed, even in bulk, a capital improvement?

These kinds of tricky questions always lurk in the thick bulrushes of the annual budget landscape.

Elizabeth Lynam of the Citizens Budget Commission calls it "very difficult to structure these capital issues according to the period of the usefulness of the technology."

She says such financing has been done before, with five-year bonds issued for certain technological improvements. But, she adds: "Even five years might be too long for an iPad or something of that nature."

The CBC hasn't taken a position on the proposal. Lynam is just posing the question of "whether this is the best use" for borrowing.

Administration officials strongly insist that it is. They cite federal tax laws that allow such bonds to be issued over what's called a "weighted average" of the probable life of the assets.

In other words, the payback period will be suited to what the bond proceeds are used to buy, they say. The budget proposal itself cites a weighted average for classroom technology projects of eight years, according to the state comptroller's office.

Cuomo seeks to persuade the legislature to place this borrowing referendum on the November ballot.

As for the state's borrowing picture, an aide described Cuomo as "very disciplined in his use of debt. For the first time in over 50 years, debt outstanding is projected to decline for a second consecutive year in fiscal year 2013-14."

But, the balances are still big. Comptroller Thomas DiNapoli, whose office is still analyzing the proposal, said in a report last year: "New York State's debt burden is among the highest in the nation, based on several measures."

Cuomo has focused his public pitch for the school borrowing on need.

"In our high-speed, high-tech world, we are leaving children behind," he said last month in his annual State of the State speech. The bond proceeds, he said, would "help re-envision our schools from the ground up."

In the text of his budget proposal, now pending before the legislature, Cuomo says projects eligible for bond funds would include "infrastructure improvements to bring high-speed broadband to schools and communities in their school district [sic], and the purchase of classroom technology for use by students."

But also, Cuomo added, part of the "smart-schools" proceeds "will enable long-term investments in full-day prekindergarten through the construction of new classroom space" for that purpose.

Article VII of the state Constitution includes language that limits most state debt to what is "authorized by law, for some single work or purpose, to be distinctly specified therein."

That was written at a time when infrastructure could only mean roads, bridges and the like. But it is still part of that tricky state budget terrain.

We should see by April what emerges from the thick weeds at the Capitol.