TOO MUCH AUTHORITY
By Bob Confer

During March and April of every year, at a time when the state legislature is working on their annual budget, we hear horror stories of State spending far outstripping our means. 

Reports indicate a current budget imbalance of $45 billion dollars, which is expected to reach nearly $60 billion in a few years. Unfortunately, this deficit, as large as it may be, tells only a part of New York’s fiscal mismanagement story.

Much more money is squandered away every year by the overabundance of authorities in NY, groups like the justifiably much-maligned Thruway Authority and New York Power Authority. There are nearly 750 such organizations, all of which are empowered by Albany to provide public services while operating under a business-like structure. Such mentality assumes each function would be an entirely independent revenue-center, assuring both functionality and profitability. In most cases, they have failed on both counts, as the total debt load maintained by NY authorities was estimated by State Comptroller Alan Hevesi to be a staggering $120 billion in 2004.

This free-for-all ultimately comes back to hurt each and every one of us. By theory, our taxes do not fund authority operations, as they are to levy user fees and tolls for funding purposes. But, legal obligations to their debtors require these authorities to service their debt not with monies from their various functions, but rather with funds bequeathed to them from Albany and the taxpayers.

This is a slap in the face because there exists a complete lack of accountability. Unlike the legislature, which has some sort of minimal accountability to voters, you cannot as a voter dictate what authorities choose to do with their money. By being designed as business functions their spending is not open to voter approval and they report virtually to no one. Of all of these groups only 11 of them have their borrowing habits reviewed by the Public Authorities Control Board, meaning 98% of these groups can do as they see fit, which is spending at a willy-nilly pace.

Unfortunately, New York State law allows this to happen. According to standards passed long ago by the legislature, each authority is completely autonomous from the State, although created by the State. Therefore, they are free of the State’s constitutional spending limits.

Indestructibility is also granted by judicial law, such as that declared in the case of Advanced Refractories vs. NYPA. The outcome basically stated state agencies are given free reign and cannot be challenged under standard civil law methods. 

Some reform has been attempted in an effort to stop the bloodletting. As an example, Hevesi and Attorney General Eliot Spitzer crafted the Public Authorities Reform Act which was signed into being by George Pataki earlier this year. A control entity like this is a start, but it may not be enough due to the nepotism or cronyism so prevalent in Albany politics. Authorities are known dumping grounds, offering plum jobs to people who had served their political party well or failed in their election quest. So, the Legislature has a political allegiance to many in control of authorities, thus limiting the fire and brimstone they will unleash upon them.

As a direct result of all of this fiscal mismanagement and political pandering with authorities, NY taxpayers are put into a precarious position. The Citizens Budget Commission the Empire State has stated that amongst the fifty states, New York possesses the third highest debt ratio (a comparative proportion of debt to assets) and is one of only eight states in which the Commission calls the “danger zone.” This indicates the state is $10 billion beyond a debt-management taxation rate that would have been competitive with other states.

In other words, in order to satisfy the state debt New Yorkers will suffer, paying an arm and leg above our already top-ranking tax burden to cover up the managerial inadequacies of those we have entrusted with our well-being.