A mandate-relief bill that passed the Senate Wednesday and is now before the Assembly would extend the repayment terms of short-terms loans local governments received in 2007 and 2008, when the economic downturn began. Governments would have seven years instead of five to pay off the loans, which would save local governments hundreds of thousands of dollars, according to Sen. Andrea Stewart-Cousins, D-Yonkers.
The short-term loans—called bond anticipation notes— have a lower interest rate than long-term bonds. If they aren’t paid back within five years, they must be converted into long-term debt at a higher interest rate, Stewart-Cousins said. Local governments obtain the notes for capital projects like building restorations and sewer projects.
Stewart-Cousins said village officials in Westchester County asked her to introduce the legislation, which is sponsored in the Assembly by George Latimer, D-Rye.
“This bill gives local governments around New York more flexibility to deal with their expenses,” she said in a statement. “BANs issued at the beginning of the recession are due this year, but many cash-strapped municipalities are struggling with budget deficits. Mandate relief measures such as this help local governments manage their difficult financial situations and save taxpayer money.”
Tarrytown estimates it could save about $300,000 a year if the legislation is adopted. Tarrytown Mayor Drew Fixell said in a statement that the measure is “fiscally prudent” and would “deliver real savings to the taxpayers throughout the state.”
The New York Conference of Mayors said the bill could help cash-strapped local governments. “Even the limited extension proposed by this bill will assist local governments at a time when they need it most,” the group said in a statement.