Public authorities and IDAs urgently need reform, Skoufis says

Chester. The committee's recommendations include prohibiting elected officials from serving on these quasi-governmental boards, whose debt has ballooned to $281 billion; and increased oversight through the filling of 400 board vacancies.

29 Dec 2019 | 07:59

A nine-month investigation found stronger enforcement is needed to make sure public agencies in New York State comply with the law.

With billions of dollars spent by public authorities every year, new laws and oversight tools are urgently needed to protect taxpayers, said Sen. James Skoufis, who opened the investigation in March.

Skoufis, chair of the Senate Committee on Investigations and Government Operations, looked into the compliance and practices of 143 public authorities across the state, including state authorities, local authorities, industrial development agencies (IDAs), and local development corporations. The committee’s document requests produced evidence of potential collusion between these quasi-governmental agencies and the governmental entities that consider local approvals for a project.

The investigations team set out to recognize best practices as well as to expose fraud. The team developed two case studies. The Medline Industries warehouse IDA application in the Town of Montgomery, revealed unethical, if not illegal, behavior and serves as an example of how financial incentives can be abused to the detriment of local taxpayers, Skoufis said.

“If there's one takeaway from our investigation, it's that taxpayers deserve far more accountability and responsibility with their money,” said Skoufis. “The results of this report acknowledge the important role that public authorities play in our state, but also pulls back the curtain on a system that's desperate for wholesale reform. Many of my colleagues and I will be heading into the forthcoming legislative session with a mission to advance substantial changes that better respect taxpayer pocketbooks.”

The committee urges the Legislature and Department of State to adopt reforms (see sidebar) in the upcoming 2020 legislative session.

Key findings:
The outstanding debt of public authorities continues to grow. In 2018, public authorities reported over one-quarter of a trillion in outstanding debt, approximately $282.1 billion, an 8 percent increase since 2014.
The state’s extensive reliance on public authorities is problematic due to insufficient statutory mandates that scrutinize their financial and operational activities.
Due to their unique status as quasi-public entities, public authorities are not subject to the same level of public scrutiny as traditional State agencies.
Recommendations:
Enact new laws that compel a more responsible consideration of IDA applications.
Prohibit elected officials from serving on IDA boards.
Increase oversight of public authorities board members.
Fill the over 400 board vacancies that exist at state authorities.
Improve existing statutory oversight of public authorities.
Increase the Authorities Budget Office's appropriation in the state budget in order to ensure more robust compliance.
Require public authorities to respond to Authorities Budget Office's recommendations.
Develop legislation requiring certification under penalty of perjury for knowingly filing false or inaccurate information.
Require public authorities to plainly disclose all conflicts of interests on their website.
Make PARIS, the database for all reported information of public authorities, accessible to the public and expand it to include additional data such as information on a project's construction jobs.