A vast portion of New York State governmental decision-making has been taken out of the hands of elected government and relegated to unelected and largely unaccountable agencies. Despite recent legislative reforms, by and large these authorities operate with relatively little oversight and operate beyond the influence of the voters. Many of these organizations, such as the Port Authority, the MTA, the New York Power Authority, the Urban Development Authority, the Thruway Authority, and the Housing Finance Agency, have significant daily impact on the lives of all who reside in this state. Residents, however, are denied any real input into their operations or policy creation.
Elected officials have willingly surrendered their responsibilities to these organizations for several reasons. First, it takes a significant workload off their shoulders. Second, hard and potentially unpopular decision making can be accomplished without any connection to the governor, assembly member, or state senator. Third, it creates an easily hidden budget gimmick to increase or mask debt. One example came during the Cuomo administration. The (elected) state government engaged in a sham transaction and “sold” Attica Prison and a part of Interstate 287 to the UDC for $200 million, which, on paper, helped balanced the state budget. Unfortunately, to pay for this charade, taxpayers were stuck with a $600 million long-term commitment to pay for UDC bonds.
The track record of these agencies has been dubious, at best. The Urban Development Corporation was the first major issuer of municipal bonds since the Great Depression to default. Indeed, a huge portion of the state debt can be traced back to irresponsible, unaccountable agencies. The list of outrages is considerable. The MTA repeatedly issues contradictory statements about its budget, changing published facts and figures seemingly at whim, in whatever manner serves their purposes of the moment.
A 2004 Comptrollers report, Public Authority Reform: Reining in New York’s Secret Government, concluded that “Although the appearance of review exists for some of New York’s public authorities, the rules are diverse and the degree of scrutiny varies. The time for meaningful reform to increase accountability, deter misconduct and reduce waste and inefficiency at the more than 640 public authorities and subsidiary corporations has come.”
In response to the public outcry over blatant acts of abuse by these authorities, Governor Paterson signed a Public Authorities Reform bill into law last December. The legislation, while enacting some beneficial provisions, remains little more than a fig leaf on the problem and fails to address the central issue of allowing elected officials to evade responsibility for hard decision making by passing the buck to unaccountable, unresponsive, and unelected organizations. The legislation:
· establishes an Independent Authorities Budget Office to oversee agencies;
· provides for review by the Comptroller of noncompetitive contracts over $1 million;
· mandates enhanced financial reporting, mission statements, and measurement reports;
· addresses some lobbying issues;
· regulates subsidiary corporations;
· requires good faith performance by board members;
· creates a whistle blower program.
Of course, all of the above does little to address the key question of allowing elected government to evade its responsibilities. The reasons for this evasiveness were accurately diagnosed in a Manhattan Institute study issued over a decade ago. The study noted that a number of vested interests—“prominent consulting, accounting, public-relations and law firms, all of whom take in millions of dollars in revenue from the various debt-financed projects of the authorities,” have far too much to lose.
Until the responsibilities inappropriately relegated to these unaccountable organizations are returned to the sunlight of elected government, our state cannot achieve the numerous structural reforms so vital to its future.
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