NY to rein in "shadow govt" of public agencies

NEW YORK, Nov 18 (Reuters) - New York's "shadow government" of powerful public authorities would be reined in under a new bill approved by the state Assembly that would require the comptroller to approve any contracts that top $1 million, state lawmakers said on Wednesday.

Public authorities have about $140 billion of debt outstanding and employed 96,000 people last year.

Civic advocates and fiscal monitors have long criticized these authorities -- such as the Thruway Authority and the Metropolitan Transportation Authority -- because they wield considerable power with little public scrutiny.

The new bill would hold authorities' board members responsible to the authorities as fiduciaries, instead of to the officials who appointed them. It would create an independent Authorities Budget Office to monitor them, and increase financial and performance reporting requirements.

Senate Democratic leaders and Governor David Paterson have also agreed to the bill; the Senate has vowed to vote on the bill swiftly.

Paterson, in a webcast news conference, said: "All told, this legislation probably has the capacity to create reforms probably not seen in this capacity in 25 years."

Under the bill, the governor would appoint the new head of independent authorities budget office, who must be confirmed by the Senate, and who would serve for four years unless removed for cause.

Other measures are aimed at preventing authorities from selling land at overly low prices to developers and restraining their ability to create debt-selling subsidiaries.