Archive for January 2015

Mario Cuomo and the Liberals – By George J. Marlin

January 22, 2015

The following appears in the January 16-22, 2015 issue of the Long Island Business News:

I first met Mario Cuomo in 1970 when I was a college freshman. He was introduced to me by his good friend and former law school classmate Republican Assemblyman Jack Gallagher. Moments after meeting him, I realized Cuomo was a sharp, fast-talking guy.

My first impressions were confirmed a year later when I sneaked into a law class he taught at St. John’s University. Using the Socratic method, Prof. Cuomo went for his students’ jugulars. He made John Houseman’s character in the movie “The Paper Chase” look like a pushover.

During his unsuccessful run for mayor in 1977, I couldn’t help but admire the tenacious Cuomo, even as I campaigned for his Conservative Party opponent. Not since conservative William F. Buckley Jr. ran for mayor in 1965 had voters been exposed to such an articulate debater.

Five years later, Cuomo proved his mettle when he went on to beat Mayor Edward Koch in the Democratic gubernatorial primary and then defeat my candidate, Lew Lehrman.

As New York’s chief executive, his son rightly described him as a “pragmatic progressive.” In the 1980s, New York was not dark blue. A U.S. senator and the state comptroller were Republicans and the state Senate was solidly in GOP hands. Cuomo promoted as best he could his leftist ideology and stuck to his guns on the issue that cost him the gubernatorial election in 1994: his opposition to the death penalty.

Cuomo’s death on January 1 brought out many of the old-time New York lefties, who praised him as a liberal icon. What hypocrisy. Back in 1994, they were knocking Cuomo for not measuring up to the words of “The Speech” he delivered at the 1984 Democratic National Convention defending liberal ideals.

Dr. Donna Shalala, former president of City University’s Hunter College, was quoted by The New York Times describing Cuomo “as a powerful and articulate spokesman for social and political issues,” yet when it came to implementing those views, she concluded, “I’m confused by Cuomo.” (This is the same Shalala, who as Clinton’s Secretary of Human Services sat by silently when he declared the “era of big government was over.”)

The Black and Puerto Rican Legislative Caucus groused about Cuomo’s “lack of urgency” when it came to minority and poverty issues.

Feminists were also unhappy. Irene Natividad, chairperson of the National Women’s Political Caucus, complained: “There’s no getting around the fact that he could do more [for women].”

As Cuomo prepared to run for a fourth term, his standing with the left was described by Jacob Weisberg in New York magazine: “There is a deep sense of weariness with Cuomo, a feeling of anger, even betrayal.”

Interesting, isn’t it? Particularly considering that during Cuomo’s tenure, state spending ballooned 123 percent, while the compounded inflation rate was 65 percent. Medicaid spending was costing taxpayers $16.2 billion annually by 1994 and represented 18.4 percent of the total national Medicaid spending, even though New York included only 10 percent of the nation’s Medicaid recipients. In addition, outstanding state and authority debt during the Cuomo years went up 107 percent from $30 billion to $62 billion.

That record is not a conservative one. And criticism Cuomo received proves liberals are never happy. One can never spend enough on his agenda to please them.

Although Cuomo and I were on opposite sides of the political divide, I like to think we were friends. After he left office we would chat from time to time over breakfast or over the phone. When I was executive director of the Port Authority, I sought his advice on a number of occasions. I always respected that he was a fighting liberal unafraid of verbal clashes with people, like me, who disagreed.

Mario Matthew Cuomo – Requiescat In Pace.

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New York, the public authorities leviathan – By George J. Marlin

January 8, 2015

The following appears in the January 2-8 2015 issue of the Long Island Business News:

During his 14 years as governor of New York (1959-1973), Nelson Rockefeller created 230 agencies and authorities and incurred $12 billion in debt to fund his grandiose plans for the Empire State. Since the end of his reign, governors and local magistrates have continued to increase the number of these entities and to pile up debt.

Today there are 325 state authorities and 847 local ones. Collectively they have incurred more than $250 billion in debt, spend $60 billion annually and employ 150,000 people with a payroll that totals $10 billion.

In a report released Dec. 23, 2014, state Comptroller Tom DiNapoli cast a light on these shadow governments: “Public authorities borrow and spend billions of dollars outside the state budget,” he said. “And from Buffalo to Brookhaven, New Yorkers foot the bill.”

DiNapoli pointed out that most of the state authorities serve as vehicles to circumvent voter approval of general obligation bonds. This financial gimmick is commonly known as “backdoor borrowing.” In other words, a given agency issues debt to finance a gubernatorial-approved capital project for which the state is bound to appropriate funds annually in its budget to cover principal and interest payments on the agency-bonded debt.

Backdoor borrowing, the report pointed out, “eliminates the opportunity for voters to have input on major borrowing decisions that affect them financially; transferring control to public authority boards [appointed by the governor] and thus further limiting accountability and transparency.”

And, as a result of this financial chicanery, as of March 31, 2014, just about 95 percent of all state-funded debt was issued by public authorities.

The governor also uses the authorities to procure one-shot revenues to balance the executive budget. The 2014-2015 enacted budget projects $265 million in transfers from public authorities. This tactic, DiNapoli observed, “obscures the state’s overall spending levels and spending growth, and diminishes oversight.”

The New York Power Authority is an example of an agency that has been a willing participant in this executive budget balancing act. Instead of using surplus dollars to lower customer electrical rates or to pay down debt, the power authority has gifted hundreds of millions to Albany’s coffers over the years.

One particularly egregious state policy imposed on public authorities since 1989 is the bond issuance charge. Almost every state agency where at least three board members are appointed by the governor must pay, for lack of a better term, a tax every time it issues bonded debt.

Here’s how it works: When the Metropolitan Transportation Authority goes to the bond market to raise, say, $500 million to pay for Long Island Rail Road infrastructure improvements, a portion of the borrowed proceeds are handed over to the state. And who gets stuck paying back this borrowed money? Commuters. In state fiscal year 2013-2014, Albany received $106.9 million in such gifts from 20 different agencies. The MTA’s share was $21.3 million.

Then there is the waste, fraud and abuse in varying degrees. Audits by the comptroller of the MTA, which employs more workers than any private-sector company in the state, uncovered a “culture of entitlement.” Inaction by the authority and lax payroll controls resulted in six employees being paid $991,000 for excessive overtime and $216,000 for hours not actually worked.

Also, an auditor reviewing the MTA’s management of cash and investments discovered that record-keepers failed to recognize that the Empire State Development Corp. owed $68.2 million.

New York’s public authorities represent a huge part of our government. And with the state’s growing reliance on them for fiscal and programmatic assistance, DiNapoli rightly concluded there is a “need for greater transparency, increased board accountability and a keener understanding of authority operations by policymakers and the public.”