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6 Fordham Urb. L.J. 65 (1977-1978)
New York - A City in Crisis: Fiscal Emergency Legislation and the Constitutional Attacks

handle is hein.journals/frdurb6 and id is 77 raw text is: COMMENT NEW YORK - A CITY IN CRISIS: FISCAL EMERGENCY LEGISLATION AND THE CONSTITUTIONAL ATTACKS I. Introduction Generous spending and, some would add, fiscal mismanagement have been a New York City tradition, putting tremendous pressures on both the City and State budgets. To forestall the deterioration of the City's financial condition and the subsequent collapse of the City itself, the New York State Legislature enacted a series of laws, many of which were feverishly incorporated into the body of State law in extraordinary session. With the creation of public authori- ties,' the authorization of State funds to aid these authorities,' and State hindrance of the payment of municipal debt service obliga- tions,3 came inevitable claims in the courts that the State had at- tempted to circumvent constitutional debt limitations.' The New York Court of Appeals responded to the constitutional attacks on the emergency legislation by manifesting, in a series of critical 1. E.g., in May, 1974, the New York State Legislature created the New York City Stabili- zation Reserve Corporation (SRC), a public benefit corporation authorized to sell bonds, the proceeds of which were to go directly to the City. N.Y. PuB. AuTH. LAW §§ 2530-51 (McKinney Supps. 1975 & 1976). In June, 1975, the Legislature created the Municipal Assistance Corpo- ration for the City of New York (MAC), authorized to issue bonds, the proceeds of which were to be used to. purchase City obligations. N.Y..PuB. AUTH. LAW §§ 3030-40 (McKinney Supps. 1975 & 1976). Also in June, 1975, the Legislature provided the administrative skeleton upon which to flesh out a municipal assistance corporation for any other city requiring one. N.Y. PuB. AuTm. LAW § 3001-21 (McKinney Supps. 1975 & 1976). 2. E.g., New York State Financial Emergency Act for the City of New York, 1975 N.Y. LAWS, chs. 868, 869, 870, §§ 22, 23. 3. E.g., New York State Emergency Moratorium Act for the City of New York, 1975 N.Y. LAWS, chs. 874, 875. 4. The constitutional debt limitation may be altered directly by either constitutional amendment or voter approval (N.Y. CONST. art. 7, § 11). Public authorities bypass this limitation by issuing bonds secured by revenues not subject to the taxing power of the legislature. Hochberg and Taylor, Public Authority Bond Issues: The Need for Legislative Reform, 21 N.Y.L.F. 183, 185 (1975). See generally, Morris, Evading Debt Limitations with Public Building Authorities: The Costly Subversion of State Constitutions, 68 Yale L.J. 234 (1958); Quirk and Wein, A Short Constitutional History of Entities Commonly Known as Authorities, 56 Cornell L. Rev. 521 (1971).

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