This was originally published by The New York Times: City Room on July 12, 2010.
A Magnifying Glass on Public Authorities
They have long operated as a sort of shadow state government: more than 700 public authorities that function largely with little public oversight.
Last December, the State Legislature passed a new law aimed at making the long inscrutable agencies more transparent and reining in their spending. Now, a state office given more power to oversee the authorities has issued its first report.
And the results do not seem all that encouraging — at least to New York taxpayers.
New York’s public authorities racked up more than $17 billion in new debt in 2009 and many failed to comply with the reforms contained in the new law, according to the report released this month by the Independent Authorities Budget Office.
The $17 billion in new debt brings the total debt accrued by authorities to $133 billion, the report states. The largest contributors to the total debt are the Dormitory Authority, which accounted for more than $38 billion, and the Metropolitan Transportation Authority, which contributed more than $28 billion.
More than 140 authorities failed to provide budget reports to the Independent Authorities Budget Office and 175 did not provide annual reports, the report said.
Of the annual reports filed, 21 percent had significant data errors and were sent back to the authorities for corrections. The mistakes included incorrect entries for the amount of debt retired during the year and inaccurate staffing, salary and compensation information, the report said.
Assemblyman Richard L. Brodsky, a Westchester Democrat, who helped shepherd the law’s passage, said he was troubled by the number of agencies who did not comply with the new law’s requirements.
“The good news is that real reform is underway here,” said Mr. Brodsky, who is running to be the Democratic candidate for state Attorney General. “The bad news is most of the stuff that they are not complying with is the simplest stuff, like submitting budgets and annual reports.”
Under the new law, members of authority boards have a fiduciary duty, or legal obligation, to protect the mission of the authorities they supervise and not the government officials who appoint them. Authorities were required to review the purpose of the authority and file a mission statement, along with measures to evaluate performance annually, the report said.
Authorities are also required to seek approval from the state comptroller for most non-competitive contracts more than $1 million and establish a committee to review their debt.
State authorities handed out nearly $6.8 billion in contracts and procurements last year. About 13 percent, about $890 million, were non-competitive, according to the report.
The hundreds of public authorities in New York have traditionally been an opaque, yet powerful force in the state, Mr. Brodsky said.
“The authorities are the real true source of state debt,” he said. “Nobody knew what they did or who was in control.”
Authorities are charged with tasks like supervising local urban development, providing affordable housing and running state highways. They range from the huge Metropolitan Transportation Authority, which employs more than 74,000 workers, to small agencies like the Nassau County Interim Finance Authority, which has five workers.
More than 80 agencies, like the Seneca Tobacco Asset Securitization Corporation, have no staff whatsoever, according to the report. The office has identified 130 authorities that seem to be performing no functions and should be dissolved. Legislation has been introduced in Albany to eliminate those agencies, the report said.
The report is a good start, Mr. Brodsky said, but the new agency monitoring the authorities needs to be more aggressive about identifying agencies that are violating the reform law. “We have gone from knowing nothing of these Soviet-style bureaucracies,’’ he said, “to beginning to rein them in.”
