Is regulatory reform working as intended?

In Columns by Hal Peterson0 Comments

For a period of about two years leading up to the 2006 statewide elections, “public authority reform” gained increasing attention as an important policy issue. Why? The politicians in office at that time could no longer ignore some excellent investigative work completed by the Assembly’s Committee on Corporations, Authorities and Commissions (born out of the Canal Corporation scandal) and two excellent reviews published by the New York State Comptroller’s Office one of which was titled: Reining in NY’s Secret Government (Feb. 2004). Also, a non-partisan Citizens Budget Commission found that our state and local authorities were poorly governed and misusing their debt issuing powers.

Former Republican Governor George E. Pataki subsequently signed the Public Authority Accountability Act of 2005 into law, suggesting that it “would emulate the best practices of corporate governance utilized by private sector companies, as well as the requirements of the federal Sarbanes-Oxley Act of 2002.” Instead of gaining momentum, the need for reform quickly waned when newly elected Democratic Governor Eliot Spitzer showed no interest in authority reform in his first year in office.

The shifting of political sands serves no one well. The Authorities Budget Office that George (Pataki) created quickly realized it lacked adequate funding statutory authority to enforce compliance. PAAA legislation transformed itself into a planning agenda upon which future expectations would be measured.

The reform genie might well have stayed locked up in its fabled bottle if it had not been for the collapse of the economy in 2008. Revenues declined and the states’ budget gap continued to grow exponentially. Former Governor David Paterson was the in office; and, based on well received advice received from a special task force, he rejuvenated the 2006 reform act with the passage of the Public Authorities Reform Act of 2010.

My next column will review with the readers of the Herald what has been actually achieved by the now Independent Public Authorities Budget Office, using as a source of information, their recently released Annual Report as a source of information. Will history repeat itself? Is real reform working as intended? Stay tuned.

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