Hochul helped pile $37K of debt on every New Yorker — and the bill’s coming due

As New Yorkers cast their ballots in Tuesday’s race for governor, the state’s economic health looms large: 34% of likely voters say taxes, jobs and inflation are the most important issues facing the Empire State, Emerson College pollsters found.

Those voters should consider which candidate will stop piling up the government debt that will soon cripple budgets — and will stick our kids with a massive bill. 

For decades, New York’s leaders have been spending money on a credit card that nobody in power ever tries to pay off.

But every dollar borrowed eventually comes back as higher taxes, service cuts and unbearable interest costs.

When you combine the debt of the state, city and county governments and school districts, every New Yorker owes $37,000, a new Reason Foundation report found — the highest per-capita debt load in the nation.

The Empire State’s combined government debt is over $744 billion, second only to California’s $1 trillion.

At the local level, New York City is in crisis — even if it hasn’t admitted it yet.

NYC is tied with Chicago as America’s most fiscally stressed city governments, far worse than all others.

The Reason Foundation analysis found that both cities trigger seven of the eight warning signs economists use to measure long-term financial health and short-term cash flow.

The two cities have extremely high debt loads, deeply negative unrestricted net positions and precarious cash positions, limiting their ability to weather future economic shocks or maintain current government service levels without future tax increases.

New York’s liabilities are staggering: The city has $315.9 billion in total liabilities but only $156.6 billion in assets — that is, its obligations are about twice its assets.

Even if the city liquidated every building and all the infrastructure it owns, it could repay only half its debts.

Creditors and pensioners are counting entirely on future tax revenues to balance the books, yet the city’s total debt is already 2.86 times its annual revenues.

A debt-to-income ratio beyond 2-to-1 shows that future revenues are already heavily committed.

After accounting for restrictions on the use of some assets (cities can’t use grants received for specified purposes for anything they want), NYC’s unrestricted net position is negative $188.6 billion.

In other words, Gotham is in a huge, long-term financial hole — too deep for balanced annual budgets to fix.

NYC also has surprisingly little cash on hand to pay its short-term obligations: Cash makes up just 9% of the city’s assets.

Even after including tax revenues the city expects to receive soon, NYC isn’t projected to have enough cash to pay all its bills over the coming year. 

Some local leaders will argue that New York City and Chicago face different circumstances than other municipalities because they are so large.

However, under our study’s framework, Los Angeles has only two financial warning signs.

Among America’s 100 largest cities, 22 have just one red flag and 18, including Las Vegas and Orlando, have no red flags at all.

Meanwhile, New Yorkers elsewhere in the state should be concerned, too: Several counties are facing similar debt dangers.

Nassau County is the state’s most fiscally stressed, with five fiscal red flags and per-capita liabilities of $10,175.

Westchester County is right behind, with four red flags and $6,016 in per-person liabilities.

Long before Mayor Zohran Mamdani arrived with his big spending plans, a long line of New York leaders — both locally and in Albany — made terribly costly decisions that piled up debt, shortchanged pension payments, boosted spending and neglected savings.

If voters let them, Empire State politicians will keep declaring victory every time they raise taxes and deploy gimmicks to fund yet more spending.

But the mounting debt at every level of government is a ticking time bomb for taxpayers.

New York needs leaders honest enough to acknowledge that the state is dangerously close to the fiscal edge — and brave enough to make the hard choices necessary to pull back from the brink.

Geoffrey Lawrence is research director at Reason Foundation and author of the report “State and Local Government Finances in America.”