News Coverage on Budget

Utica Observer-Dispatch

Officials: Cuomo plan could mean less oversight in borrowing

Michael Gormley
Friday, February 10, 2012

 

A provision in Gov. Andrew Cuomo's proposed budget amendments could greatly expand the power of state and local governments to borrow money with less independent oversight while potentially avoiding approval from voters or the Legislature, according to three state officials familiar with the proposal.

The proposal appears to let the state Dormitory Authority, which finances and constructs state office buildings, as well as buildings for public colleges, extend its borrowing power to a wide array of state and local projects.

That could mean more "back-door borrowing" that can avoid the need for approvals from local voters or the state Legislature as well as avoid fiscal scrutiny by the state comptroller's office, the officials said.

They spoke on the condition of anonymity because of the sensitivity of budget negotiations between the governor and Legislature.

Cuomo's office disputed the interpretation.

"The amendment does not expand the power for state and local governments to borrow money and it will not be used to do so," said Morris Peters, spokesman for the Division of Budget.

Cuomo is seeking what he calls greater flexibility to take on up to $25 billion worth of economic development projects statewide in a bid to create jobs under an ambitious New York Works program.

He had previously proposed in his January budget the power to move funding between agencies without need for the Legislature's approval after a budget is passed. Several lawmakers said at the time it appeared to be a power grab by Cuomo.

But Cuomo's plans for major projects in every part of the state using public and private partnerships come at a time when state government funds are sapped by the recession and staffs and resources have been cut during three years of deficits and budget cuts.

Cuomo has said flexibility is needed to make the most efficient use of resources, including personnel across agencies.

"Efforts to streamline government and make the state work more efficiently need not compromise transparency and accountability," state Comptroller Thomas DiNapoli said Friday. "Appropriate oversight and checks and balances ensure that taxpayers are getting the most for their money."

Cuomo's office has said his budget amendments are minor, technical changes and most are. But the provision regarding the Dormitory Authority appears to provide potentially far greater power to the authority under control of the governor.

Kerri Biche, spokeswoman for the Assembly's Democratic majority, declined to comment. There was no immediate comment from the Senate's Republican majority.

 

The state Dormitory Authority has borrowed hundreds of millions of dollars to build college dormitories and state office buildings around the state. Its staff is expert in construction management and financing.

Cuomo's budget amendments, released Wednesday, include changes that would empower the authority to "enter into a lease, sublease or other agreement with the state of New York or a public corporation therein." That would cover villages, towns, cities and counties as well as local development agencies and special districts such as those served by volunteer fire departments.

Richard Brodsky is a former Democratic assemblyman who wrote laws that have sought in recent years to bring greater transparency to public authorities that borrowed and spent hundreds of millions of dollars outside of the Legislature's control. He says Cuomo's budget amendments run "exactly counter" to those efforts.

"Generally speaking, these authorities need more oversight by the Legislature and comptroller, all of which seems to be under siege in this budget presentation. I think it's a mistake," Brodsky said.

 

 

 

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