2These are the first achievable and concrete steps in our efforts to shrink the size of government andreign in public debt. Governor-elect Cuomo has spoken repeatedly of the need to reduce the number of state and local government bodies. The Millstein Task force recommends that public authorities reviewtheir subsidiaries and dissolve those that are not necessary. The Task Force also recommends the ABOlead the review of public authorities which may not be needed. It must be emphasized that this reviewis more highly technical and difficult than is generally thought. It will require not only a review of function and purpose, but of debt structures and relation to activities of state agencies. We againcaution that this review requires additional staff at the ABO, which must be provided immediately.
Ban “Bonuses” and Contingent Compensation
Committee investigations have revealed a pattern of excessive compensation at some authorities,usually local authorities. Excessive compensation is usually but not always in the form of contingentcompensation and includes practices that are part of collective bargaining agreements and payments tomanagers or executives. There appears no policy objection to those that are bargained. We make nofinding as to the wisdom of any particular such agreement, but they do not appear to lead to excessivecompensation and are matters of public record.Such is not the case with respect to managerial compensation. The Committee has found repeatedinstances of excessive compensation, secrecy, and board irresponsibility.
ertain of these cases,including those at the Fulton County Economic Development Corporation and related entities, and theGreene County IDA have caused serious public controversy and may be under scrutiny by other government agencies. Payments to authority employees in some cases rise to the millions of dollars, theexplanations as to why they are necessary are sometimes bizarre, and board members appear surprised by their extent. It is important to remember that in all these cases, authorities and LDC's are being usedto transfer public assets into private hands. Generally title to publicly owned real estate that seems tohave little value is transferred to other public entities, and eventually ends up in private hands. Theincreased value of the property is either left in those private hands, or in one of the public entities. It isthat increased value which has been given in the form of “bonuses” or contingent compensation. It isclear that contingent compensation practices present a serious danger to the public interest. It is not just that the compensation is excessive, it is that the increase in value of a public asset should be left inthe hands of the taxpayer whose property it was originally. There is legislation dealing with this problem which should be enacted quickly. (A.11461)
Mandate Debt Management and Reduction Plans
In light of recent events, it has become clear that the mandatory imposition of debt management anddebt reduction practices for all public authorities will lead to reduced waste and abuse. These public plans are necessary not just to reduce public indebtedness, but to assure that when new debt is issued, itwill be both necessary and acceptable to the public and markets. We have recommended legislation thatwould mandate debt management and reduction policies for all public authorities.
Increase Funding for the ABO
The important reforms in PARA that are beginning to be implemented will collapse if the ABO doesnot receive the funding it needs to carry them out. We emphasize that the ABO is funded by public