New York’s Fiscal Slide Down a Slippery Slope!

In Columns by Hal PetersonLeave a Comment

The Citizens Budget Commission, a nonpartisan, nonprofit “watchdog group” with a mission to achieve constructive changes in the finances and services of the city and state, just issued a study titled “A $10 Billion Dollar Reason to Rethink Economic Development in New York.”    

This is an interesting study with all of the numbers going in the wrong direction. The above total encompasses large appropriations for major new projects in downstate New York, including but not limited to, the new Tappan Zee Bridge, the La Guardia Airport project, Moynihan Station, Javits Center, Hudson Yards, Hunter’s Point, Belmont Park, and last but not least, the second phase of the Buffalo Billions Project.   

While the CBC report does not identify the funding resources provided for each project, you can be assured money does not grow on trees, it comes from our states budget and borrowing managed by two public benefit corporations i.e. public authorities (a) the Urban Development Corporation with operating expenses of $1.2 billion, and (b) the New York Job Development Authority with operating expenses of $2.96 billion, both subsidiaries of the Empire State Development (ESD) Corporation. Combined debt, $23 billion.   

ESD also promotes and manages numerous job creation programs offering businesses tax credits, exemptions, and deductions to locate, hire, expand and invest in the state. The latest one to hit the press, a $620 million “Life Science Initiative” program that includes $100 million to expand the Excelsior Jobs Program; $100 million for a new life sciences R&D; $320 million in state grants to support early-stage life sciences ventures.  

Taxpayer advocates are not overly enthralled with many of these endeavors. Why? Little transparency dealing with the effectiveness of all of these activities is evident, and job creation results, according to both the CBC and the Pew Research Center studies are ‘underwhelming.’  

Let’s put this bad genie back in his bottle and add to the spending equation, the operation of 573 state and local public authorities, including ESD +, with 94% of their debt absent Constitutional stipulated voter approval. This debt is, for the most part, “backdoor” loaded, making repayment (over time) more expensive.    

One common thread permeates both landscapes. In New York, as in other states, lawmakers and public officials appointed to office have a fiduciary responsibility to act in our behalf in managing the resources placed at their disposal. There is no such thing as a free lunch, and individually and collectively many in office are doing more harm than good. Including ESD and using Ballotpedia as a source of information, grand total state spending in 2017 was $150 billion, $7,633 per capita; debt another $137 billion, $6,958 per capita, quickly approaching constitutionally authorized debt limits. Nothing rational about these numbers, we’re headed down a slippery slope.  

Looking for answers? Let’s check out the role of NYS Comptroller Thomas P. DiNapoli’s. In office since 2007, Tom is our chief financial official tagged with the responsibility of ensuring “State and local government’s use taxpayer money effectively and efficiently.” With no evidence of his presence in recent Amazon negotiations, not what you would hope for. Issue after issue is studied, and what you read, three, four and five years ago, is what you will read today. “Ensuring” does not apply, the same drawn subject matter cards remain on the table. You be the judge.

Again, looking for answers? New York State also has in place an Authorities Budget Office. Badly funded at the discretion of the governor’s office, their mission statement, simply stated, is to hold public authorities more accountable. I worked with former Director David Kidera on a number of issues and he shared with me the following:     

“It is time for a comprehensive debate on the future of our public authorities and whether New York State, its local governments, and its taxpayers can continue to support the growing size and cost of this system. We need to reach consensus on practical ways to manage the proliferation of local authorities, assure that their financial decisions promote sustained economic growth across the State and the creation of career-oriented jobs, and examine opportunities to consolidate, eliminate, or restructure authorities, at the state and local level, with similar missions or common public purposes.”

“We need to amend our laws to establish the legal framework within which we expect authorities to operate into the future. We also must consider better enforcement tools that will heighten compliance with statutory and ethical standards and instill trust that the decisions of public authority directors and executives are being made in the best interests of the public.” (2)

David’s remarks fell on deaf ears right up to desk of former State Senator Dean Skelos.  We’re bound to run on empty. The inmates are running the institution.  Your thought appreciated. 

  • CBC report titled “Economic Development Scorecard 4/24/19.
  • ABO 2012 Annual Report.

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