Issues -- Public Authorities

The main problem with our "public" authorities is that they are anything but public.

These entities are corporations chartered mostly by the State of New York. Under their charters, they are generally relieved of the duty to publish their financial activities. Their directors need not explain their actions, and are not held responsible for whatever they do.

These entities are often fiscal black holes; money goes in, but never seems to come out. The money can come from local, state, or federal sources. Corporate bonds are floated, purportedly for the purpose of creating some capital improvement, and paid for out of the new revenues this improvement will generate. But the connection between the bonds and the theoretical capital improvements is almost never established fully. Instead, the money is often diverted to other purposes, including operating expenses that are supposedly off-limits.

The power of the directors of public authorities is outside the usual review process -- the public microscope under which all government activities are supposed to occur. In theory, this is designed to allow the authorities to accomplish the capital improvements for which they are created, without the constant struggle to accommodate fickle, and constantly changing, public opinion. In fact, the lack of oversight has gone too far.

It is no wonder the public authorities are called the “shadow government". They operate with taxpayers' money but outside of the light of taxpayers' supervision.

First, we need to identify just how many public authorities actually exist (that's right -- nobody knows the exact number). Second, we need to eliminate those entities that serve no purpose. One fine example is the "Overcoat Development Corporation". This Class-A public authority was created about 20 years ago for the purpose of convincing an overcoat manufacturer to move his plant from Indiana to New York. Nobody seems to know whether this happened, or whether this manufacturer is still in business, but the Overcoat Development Corporation is still out there, spending untold moneys on unknown activities.

Third, we need to change the rules under which the authorities operate. We must shine the light of public inspection on all their activities, and hold the directors responsible for their actions.

By taking these steps, we have the potential to save billions of dollars in current spending, and tens of billions of dollars in future obligations. Additionally, we can re-establish public control of mass transit, energy policy, economic development, city planning, and many other areas where government, and the public, are supposed to know what is going on.