Meanwhile . . .

A commitment to efficiency in state government:

Horace Mann School, the $29,000-a-year preparatory school in the Bronx, and dozens more New York educational and cultural institutions just got stuck between the collapse of auctionrate bonds and an expired New York law.

Rates on $60 million of the securities sold by Horace Mann in 2002 rose to 5.4%last month from 3.4%. At nearby Riverdale Country School, where tuition is $35,250 for grades six through 12, interest jumped to 11% from 3%. Interest costs almost doubled for borrowers in the $330 billion auction-rate bond market this year after banks stopped buying unwanted securities for the first time since they were created in the 1980s. Unlike local governments across the country, the New York institutions can’t convert the bonds into other types of debt after a state funding law expired January 31.

. . .

More than 800 YMCAs, libraries, hospitals, universities and prep schools in the state sold socalled civic-facility bonds, including auction-rate debt, through industrial development authorities, according to the Albany-based New York State Economic Development Council.

Auction rates for some of these borrowers have risen as much as fourfold.

. . .

Civic groups in New York lost their ability to borrow using development agencies as state lawmakers battled over rewriting the law that governs industrial authorities. Assemblyman Sam Hoyt of Buffalo, a chairman of the local governments committee, refused to extend debt-issuing authority.