New York University Lobbies For Law Change Amid Growing Debt

New York, one of the largest borrowers among U.S. states, is quickly approaching its legal debt limit, and now state university officials are offering proposals.

The state university system is suggesting legislators change laws that would provide for increased bond sales, and exclude the proceeds from being counted against the defecit.

“If you no longer counted the residential-hall debt against the cap, that would allow the state to borrow $900 million for other programs,” Philip Wood, the school system’s vice chancellor, told Bloomberg.

New York limits state-supported debt to nearly $3,000 per person, three times greater than the national average, Bloomberg reports. The state plans to sell $5.4 billion in bonds at the end of this year in an effort to eliminate over $3 billion in debt.

The available room under the state's outstanding debt cap is expected to decline over the next few years by more than $2 billion, putting pressure on the university system, which rates 48 percent of its buildings in poor condition.

Despite the bond sales, dormitory revenue has fallen short of the necessary proceeds to settle necessary debt payments.