Lost in the months-long power struggle in Albany was the Legislature’s approval of a measure dubbed the Public Authorities Reform Act. Its sponsors, as well as a number of editorial boards and proclaimed good-government groups, are pressuring Gov. Paterson to sign this bill into law. For the good of New York, he must resist.
In concept, reforming New York’s public authorities ranks right up there with motherhood and apple pie. Who doesn’t want greater transparency and accountability on budget and management practices from government-run entities, including the MTA and the Port Authority?
But the devil is always in the details — and a little digging shows that this bill would represent a considerable step backward for the state, and even worse for New York City.
Despite their limits, New York City wouldn’t be what it is today without public authorities. Over the last century, various authorities have successfully undertaken a wide range of critical infrastructure projects — building bridges, power plants, hospitals and colleges — and vital economic-development initiatives, such as the rebirth of Times Square and creation of Battery Park City.
Our state adopted the use of authorities to handle certain tasks that serve the public interest, but are better done at arms-length from politics and the usual restraints on government. Most notably, they’re funded with dedicated revenue sources, rather than relying on annual appropriations through the highly politicized budgeting process.
Today, our public authorities are far from perfect, and certain reforms are in order. Some of the current bill’s provisions are worthy, including ones to put more teeth behind the Authority Budget Office and to hold board members more accountable to their fiduciary responsibilities.
But other parts of the bill would emasculate authorities to the point that they once again would become hopelessly entangled in a web of overlapping government bureaucracies and cease to be effective.
For example, it would compel the state comptroller to review and approve most authority procurements, even though most authorities already report to a range of existing oversight entities.
Consider the New York City-based authorities responsible for the construction and upkeep of public schools, hospitals, affordable housing and other vital facilities. These already report to and are heavily scrutinized by the city’s Office of Management and Budget, as well as the Office of the City Comptroller and the City Council. What could another layer of oversight possibly add?
A second fatal flaw: The bill would eliminate each authority’s flexibility to sell properties for less than market value even when there’s a defined economic-development/urban-planning objective to be achieved.
Both the city and state have sponsored a number of essential projects — including the Hudson Rail Yards, East River Science Park and Willets Point — that have relied on the government’s ability to negotiate the terms of a sale, rather than being forced to blindly accept the highest bid.
Rather than encouraging such long-term thinking, the bill would eliminate opportunities to leverage billions of dollars in private investment and achieve far-reaching economic-development objectives.
One final objection: The Legislature failed to undertake a fiscal-impact review before passing this bill, even though a cost analysis is a statutory requirement.
Given the huge potential costs of this legislation to the public, Gov. Paterson should demand a more substantive review of this (or any similar) legislation’s costs before any further actions are taken.
Gov. Paterson should send lawmakers back to the drawing board, starting with the special session in September. They ought to be able to produce a bill to bring much needed accountability and transparency to the public authorities without stifling their ability to create jobs and spur economic development and without making delays and cost overruns more likely in critical projects.
Richard T. Anderson is president of the New York Building Congress.