What is the LGAC?
LGAC is the acronym for the New York Local Government Assistance Corporation. LGAC was created in 1990 to provide a means for the State to reduce its annual reliance on intra-year short-term borrowing for cash flow purposes (also known as the “spring borrowing”) and to reduce its accumulated “GAAP” deficit. Pursuant to legislation, LGAC is authorized to issue up to $4.7 billion of its bonds, secured by a contractual obligation with the State, to make payments to local governments and school districts. The most significant component of this legislation is that as LGAC issues its bonds, the amount of intra-year short-term borrowing that could be undertaken by the State could not exceed $4.7 billion reduced by the amount of bonds and notes issued by LGAC. Over the years from 1959, the State’s short-term intra-year borrowing had increased to a high of $4.3 billion. The need to complete this borrowing in order to make payments to school districts and other municipalities placed the State at
