Andrew Cuomo is considering a debt limit increase to avoid a government shutdown in mid-October, as the nation faces its most serious debt crisis in more than a decade.
The governor has asked the Democratic-controlled legislature to pass a package that would authorize an $85 billion spending increase for a limited number of days before a shutdown would occur.
But if the legislature fails to approve that package by the deadline set by President Donald Trump, the governor could call a special session and take the matter to the state Supreme Court, which could overturn a governor’s ruling.
The idea of a debt-limit increase has emerged as a possible compromise in the fiscal cliff negotiations, but the governor’s proposal could face strong opposition from lawmakers who are concerned about the potential damage a debt default could do to the economy.
The state budget deficit is projected to balloon to $3.9 billion by 2021, and the governor has pledged to keep spending below that level, despite calls from some Republicans for more spending.
The state budget is projected by the Legislative Fiscal Bureau to reach $4.5 billion in 2021-22, and it is unclear how the governor would raise the state’s deficit, which has ballooned to $9.3 billion.
Cuomo has proposed that the state spend more on schools and other public services, but he has not yet proposed how that would work.
While he has been open about the idea of an emergency borrowing authority, Cuomo has also proposed spending money on a program to create an incentive for businesses to hire workers instead of replacing them with cheaper ones, or paying lower wages.
Cuomo also has proposed an increase in the state sales tax that would help fund the state government, and he has suggested raising taxes on cigarettes and other tobacco products.
On Monday, Cuomo’s administration said it would take $8 billion in additional state revenue to cover the cost of the additional tax, but lawmakers would have to approve it.
“We can’t afford to shut down our economy and our state,” Cuomo said in a statement.
“We cannot and we will not do this.
The best way to reduce the economic pain and anxiety is to make sure we have a strong economy.
We must do what is right for our families, our state, and our country.
We need to be responsible stewards of our taxpayers’ money.”
The debt ceiling debate is a stark contrast to the debate over the state budget.
The governor has proposed raising taxes to cover a $1 billion spending shortfall, and lawmakers have resisted the idea.
The two sides are still negotiating about the next steps, including whether to take a broader approach to the debt limit.
Cuomo’s office did not immediately respond to a request for comment.