Public Authorities in New York State
Public authorities play a major role in delivering public services. They supplement direct government agencies in three ways:
- Provide a business-like organizational structure for public services that are financed primarily by user fees and whose capital investments are self-financed through bonds supported by user fees.
- Provide a stewardship for major capital assets and make long-run investment decisions with some isolation from pressures of the electoral cycle.
- Provide a mechanism for taking advantage of federal tax benefits for economic developme nt and other purposes that otherwise would be treated as private activities.
Authorities are intended to strike a balance between political accountability and political independence. Unlike heads of direct government agencies, governing boards of authorities are expected to be more independent of those who appoint them, to make difficult and unpopular decisions outside the arena of elected politics, and to be accountable to the public indirectly through reporting, transparency in decision-making and long-run performance.
New York State makes extensive use of public authorities. It has created 583 authorities, and they have created subsidiaries that bring the total number of entities to 740. They assist in a variety of important public services including, providing electric power, creating and maintaining bridges and highways, running mass transit systems, building and operating housing, financing higher education, and providing medical care. State officials, typically the Governor, appoint the majority of board members to 104 authorities. Local government officials appoint the boards of 474 authorities, including 17 accountable to the City of New York. Five authorities have boards whose members are appointed by officials of more than one government.
New York State’s extensive reliance on authorities has given rise to four significant problems:
- Misuse of the power to incur debt
- Insufficient oversight and coordination of project revenue backed and private conduit borrowing
- Insufficient reporting to support accountability
- Insufficient independence in governance