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News

Empire Page, April 4, 2006

Pork-Barrel Spending – New York Style
State
Senator Liz Krueger

No doubt, every State in the union has “pork-barrel politics,” but as is so often the case with New York, we have our own unique approach. Each year, significant amounts of taxpayer dollars are allocated in huge, vaguely explained lump sums within the State budget by the Governor and the two legislative leaders (Senate Majority Leader and Assembly Speaker). These lump-sum slush funds totaled $2.6 billion in new and re-appropriated funding in the 2005-2006 budget, which the two legislative leaders and the Governor can then dole out to fund pet projects throughout the State.

The process works like this: The two legislative leaders and the Governor agree to insert into annual budget bills multimillion-dollar lump-sum funds for projects to be determined at a later date. After the budget is passed and signed, the three then decide the details in private, backroom deals with no vote or participation of other legislators. These deals are formalized through Memoranda of Understanding (MOUs) -- agreed to and signed by the three men without either the public or the legislature’s input or approval. The "understanding" they reach is that each one gets a share of the funds to distribute as choose.

Recent examples of spending approved through such MOUs type deals include funding for the Centers of Excellence, the GenNYsis program, the Community Capital Assistance Program (CCAP), Empire Opportunity Fund, Multi-Modal Transportation Projects, and RESTORE. Even a 2004 stand alone bill providing authorization to expand the NYC Convention Center had a last-minute amendment that provided $350 million dollars for the Excell-NY for regional projects to be determined at a later date.

A recent study by the Institute for Competitive Government (Capital Pork: How State Politicians Divvy Up Billions For Favored Capital Projects, March 2006) found that in just one category of MOU deals funded by State borrowing since 1997, the Governor and Legislature have authorized borrowing up to $3.2 billion for these programs, Of this, $1.7 billion has been allocated, leaving $1.5 billion to be spent in future years. There also seems to be significant regional disparities in the funding authorized through MOUs, ranging from a high of $1,000 per capita in some upstate regions to a low of just $29 per capita in New York City.

The three leaders have never fully disclosed to the public, or even their own legislators, how they spend this borrowed money. Millions of dollars fly around New York State below the radar, with no audits and little public scrutiny. There are few rules when it comes to pork, leaving lawmakers to choose projects without statewide competition, with no requirement of financial need, with little concern for conflicts of interest and – perhaps -- with a nudge from those who contributed money to re-election campaigns. While some/many of these projects may be worthwhile…the question is how are these decisions being made. Why are we deciding to borrow and spend hundreds of millions of dollars that is given out to private companies, public and private universities and for-profit retail, industrial and sports conglomerates? Enormous grants to private companies also raise the question of why NYS tax-payers are not becoming share-holders if they are footing part of the bill for the expansion of private ventures. Who is deciding that large investments in private sport stadiums is more important than investments in building schools, housing and public transportation?

Not ironically, attempts to learn the details of these deals are not even available through the State’s Freedom of Information Law (FOIL) because both the legislature and the Governor’s office claim to be exempt from these rules when it comes to sharing signed MOUs. Additionally, many of these projects are funded through off-budget Public Authorities, with further obscure the process. Money flows back and forth with little regulation between the state budget and the authorities' budgets, largely because authorities can borrow money without the public's permission. In effect, the authorities serve as little more than piggy banks for the leaders' pork projects. The State Comptroller’s office has complained that it can take years to determine how these funds are spent – long after the fact.

Shining a Light on Secret Spending

This is why I have proposed a common-sense measure that would bring much needed transparency to the state budget. The legislation I am currently drafting would make MOUs public documents under the Freedom of Information Law (FOIL) and would require that these documents be made available for public review. It would require the disclosure of documents that indicate the specific project to be funded, who was involved in selecting the project, and the selection criteria. It would also require all MOUs to be put before the State Legislature for a vote, giving elected officials (the representatives of the public) a role in the decision making process.

Legislation that shines light on MOUs would go a long way toward limiting some of the more outrageous examples of pork-barrel spending. In fact there is already important evidence of progress. After I and my Democratic colleagues highlighted the problem of MOU’s in the budget process earlier this year, the legislative leaders were embarrassed into moving away from this model in this year’s budget. While there are still over $2 billion in reappropriations from previous years covered by MOU’s in the 2006-2007 budget, the budget passed by the legislature on March 31, 2006 included no new MOU deals, and many more dollars were actually line-itemized for individual named projects. This will allow for public review of these projects, and create accountability by requiring legislators to vote yes or no on specific expenditures. Unfortunately, the budget also introduces a new model, giving both the Speaker and the Majority Leader undefined new pots of money to distribute as they desire through “a Plan with the Department of Budget.” These pots total approximately $77 million in this year’s budget.

Lack of accountability in the budget process and undisclosed Pork spending are only some of numerous problems in the State Capitol; it is a symptom of a government that has become addicted to its own excesses and cannot seem to kick its habit. While the rules seem to have changed slightly for the better this year, it is also clear that we have a long way to go in creating real accountability over State government spending decisions.

 

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