Schulz v. State of New York
New York Court of Appeals
639 N.E.2d 1140 (1994)

- Written by Sean Carroll, JD
Facts
The New York State Legislature (defendant) passed a law authorizing over $20 million in state bond funding for the purpose of transportation. Specifically, the act authorized the State Thruway Authority and the Metropolitan Transportation Authority (the authorities), each a public corporation, to receive funding. The funding was required to be appropriated by the legislature and was derived from taxes and fees collected in exchange for the public’s use of the authorities’ services. The act explicitly stated that any bonds issued were not to be considered a debt of the state. The act also stated that the state had no legal or moral obligation to appropriate funding or otherwise support the authorities financially. Robert Schulz (plaintiff) sued the state, claiming that the law created state debt that was constitutionally required to be approved by a referendum. Alternatively, Schulz claimed that the law created a moral obligation on the part of the state to fund the authorities and not let them default on bond payments. The trial court ruled that the bonding did not violate the state constitution. The appellate court affirmed. Schulz appealed.
Rule of Law
Issue
Holding and Reasoning (Kaye, C.J.)
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