The far-reaching 2009 Public Authorities Reform Act (PARA) was enacted in March, 2010 to establish sweeping accountability and transparency requirements in over 700 state public authorities and local Industrial Development Agencies. PARA was necessary in part because New York’s 50 largest public authorities have issued and are currently responsible for at least $161 billion of debt financed by taxpayers—a sum greater than the state’s entire annual budget.
PARA provides more tools for oversight and censure and addressed several of the key ideas for reform originally outlined in our Getting Our Money’s Worth report published in 2007:
Business Standards
- Requires “labor peace” agreements for hotels and convention centers built on state public authority land or that receive state public authority funding. A labor peace agreement levels the playing field for workers who want to join a union by ensuring greater access to talk to workers for a labor union in exchange for the union not picketing or striking a worksite.
- Expands Minority and Women Business Enterprise standards to all public authorities’ contracts, which will help equalize opportunity for minority- and women-owned businesses throughout the state.
Accountability Measures
- Establishes the first statewide public input mechanisms which require authorities to receive and act upon complaints from the public.
- Empowers the Authority Budget Office (ABO) to launch formal investigations of authorities’ contractors and subsidy recipients.
- Authorizes the ABO to suspend or remove directors, and empowers governance committees to examine ethical and conflict of interest issues.
- Strengthens the rules governing the sale or disposal of public authority property; IDAs and other public authorities will no longer be able to give “sweetheart” land deals to developers.
- Limits the number of subsidiaries that public authorities can create and the amount of debt subsidiaries are allowed to issue. Subsidiaries must now notify the Authorities Budget Office 60 days prior to formation and issue annual reports on their activities.
- Authorizes the NYS Comptroller to review contracts, including all no-bid contracts and contracts over $1 million.
- Strengthens whistleblower protections.
Transparency Reforms
- Requires IDAs and their subsidiaries to disclose board members, their biographies, and any other committee members, and report board performance evaluations.
- Creates stronger requirements for reporting financial information and disclosing data to the public, including financial reports and plans, audits, assets bought and sold, and capital budget.
- Strengthens the rules governing contact between lobbyists and public authorities.
While recent PARA reforms are an important first step, they do not fix IDAs’ fundamentally flawed approach to economic development. We need to build on the momentum for reform to push for further reforms specific to IDAs and other economic development agencies to create a more sustainable economy and more livable communities.