Institutional Federal Compliance Report 2021

86 • Notes to Basic Financial Statements __________________________________________________________________________ Debt service expenditures (principal and interest) related to the above general obligation bonds during the year were approximately $302 million. Federal subsidies related to the interest payments made during the year on Build America Bonds were $3.5 million. The total amount of general obligation bonds autho- rized but not issued at March 31, 2019 was $2.5 billion. Debt service requirements for general obligation bonds in future years, which are financed by transfers from the General Fund to the General Debt Service Fund, are as follows (amounts in millions):

Fiscal Year

Principal

Interest

Total

2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2025-2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2030-2034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2035-2039 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2040-2044 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2045-2049 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

190 $

101 $

291 266 254 236 218 938 514 332 116

173 169 158 147 683 385 272 107

93 85 78 71

255 129 60

9

2

—00000

2

2,286 $

881 $

3,167

Debt service requirements were calculated based upon actual rates ranging from zero percent to 5.62 percent.

Obligations Under Lease/Purchase and Other Financing Arrangements

Note 7

Governmental Activities Debt The State has entered into contractual financing arrangements with certain public benefit corporations and other entities for various capital assets, local assis- tance payments and deficit financing. Under these agreements, generally, construction costs are initially paid by the State from appropriations (reported as capital construction expenditures in the governmental funds). These appropriations are then repaid to the State from the proceeds of bonds issued by the public benefit corporations or other entities (reported as financing arrangements in the governmental funds). The State becomes the tenant of the facility under a lease/purchase agreement, which provides for the payment of rentals sufficient to cover the related bond debt service and for the passage of title to the State after the bonds have been repaid. The State has also entered into contractual oblig- ation financing arrangements (also referred to as “service contract bonds”) with certain public benefit corporations that have issued bonds to finance past State budgetary deficits, grants to local governments and various special project initiatives undertaken in partnership with private entities, including commercial enterprises, for both capital and operating purposes. The terms of these arrangements require the State to fund the debt service requirements of the specific debt issued by these entities. Chapter 59 of the Laws of 2000 enacted the Debt Reform Act (Act) which applies to all new State-sup- ported debt issued on and after April 1, 2000. The Act imposes statutory limitations which restrict the issuance of State-supported debt to capital purposes only and

establishes a maximum term of 30 years for such debt. The Act also imposes phased-in caps that ultimately limit the amount of State-supported debt issued on and after April 1, 2000 to 4 percent of State personal income, and limit State-supported debt service on debt issued on and after April 1, 2000 to 5 percent of total governmental funds receipts. The Act requires that the limitations be calculated by October 31st of each year using the State-supported debt outstanding and State- supported debt service amounts from the previous fiscal year. As of March 31, 2018, the cumulative debt outstanding and debt service caps were at 4 and 5 percent, and there was $44.7 billion of State-supported debt outstanding applicable to the debt reform cap, which was about $6.5 billion below the statutory debt outstanding limitation. The debt service cost on this new debt was $4.5 billion, about $3.8 billion below the statutory debt service limitation. The Act does not apply to debt that is not considered State-supported and therefore does not encompass State-guaranteed debt, moral obligation debt, and contingent-contractual obligation financing. The State and some of its public authorities which issue debt on behalf of the State have purchased letters of credit and standby purchase agreements from various providers to ensure that the liquidity needs of certain variable rate demand bonds can be met. As of March 31, 2019, these agreements covered $1.48 billion of variable rate demand bonds outstanding, with costs ranging from 40 to 55 basis points of the amount of credit provided and expiration dates ranging from June 24, 2019 to April 1, 2022.