NYS Office of the Comptroller DiNAPOLI: PUBLIC AUTHORITY DEBT BALLOONED TO $329 BILLION

 

97% of All State-funded Debt Outstanding Issued By Public Authorities

State and local public authorities reported debt outstanding totaling more than $329 billion in their most recently reported fiscal years, an increase of 23% ($61.5 billion) since 2017, according to a report released today by State Comptroller Thomas P. DiNapoli.

“Many of New York’s public authorities play a major role in state operations, but far too often they function without adequate public scrutiny,” said DiNapoli. “My office issues this periodic report on public authorities to shine a light on their finances and operations. However, as my audits have shown, New York’s public authorities must do more to improve their transparency and accountability to the public and demonstrate they are operating effectively and efficiently.”

Public authorities have an outsized impact in New York where they are responsible for a wide range of public functions, particularly in the areas of transportation, energy, environmental protection, housing and economic development. As of July 2022, there were 1,178 public authorities in New York, including 876 local, 294 state (including subsidiaries), and eight interstate or international authorities. Public authorities generally are not subject to many of the oversight and transparency requirements that apply to other government agencies, or the same types of controls over their contracting practices and day-to-day operations.

In their most recent filings, generally covering public authority fiscal years ending in 2021 or 2022, state and local public authorities reported total annual revenues of $76.9 billion and expenditures of $78.3 billion. State authorities alone accounted for $49.5 billion in spending, equivalent to nearly one-quarter of the state’s All Funds expenditures of $209.3 billion in State Fiscal Year (SFY) 2021-22.

While state and local public authorities reported the majority ($183.3 billion or 55.7%) of their debt was revenue debt issued for authority purposes, $68 billion (20.7%) was issued for state purposes. Most of this “backdoor borrowing” was completed through three authorities: the Empire State Development Corporation, the Dormitory Authority of the State of New York and the New York State Thruway Authority. By borrowing through public authorities, the state bypasses the voter approval process and diminishes transparency, accountability and oversight. The State has increasingly used public authorities for borrowing: As of March 31, 2022, public authorities had issued approximately 97.2% of all state-funded debt outstanding.

DiNapoli’s report also found that:   

• The state relies on public authorities as a source of revenue to support state spending. These transfers make it easier to present a balanced state budget picture and avoid potentially difficult decisions on spending and/or revenue.
• State and local public authorities reported 32,103 active competitive and non-competitive contracts worth $111.8 billion. Of these, nearly 16% were awarded non-competitively.
• State and local public authorities reported 166,818 full and part-time employees for the most recently reported fiscal year. Total compensation totaled over $13.2 billion, and over 33% of state public authority employees had total compensation of $100,000 or more. By comparison, less than a quarter, or 21.6%, of New York residents earned as much.

DiNapoli’s report highlighted several recent audits of public authorities that exposed lax contracting processes, improper payments, loose controls, and inadequate oversight of and within New York’s public authorities.

To improve public authorities’ transparency and accountability to the public, DiNapoli called on lawmakers to discontinue its reliance on backdoor borrowing and the use of debt gimmicks, eliminate the use of lump sum appropriations, and improve transparency and fiscal discipline.  

Report

Public Authorities by the Numbers

Public authorities self-report financial information in the Public Authorities Reporting Information System (PARIS), an online data entry and collection system. They use PARIS to comply with various statutory and regulatory requirements. The Office of the State Comptroller does not independently verify the data that authorities enter.

To view authority data from the most recently reported fiscal year in PARIS on debt, spending, procurement and employees:

State Public Authorities Dashboard

For historical data reported in PARIS from 2007 to present, Open Book New York contains Summary Financial Information (from the statement of net assets and the statement of revenues, expenses, and change in net assets) and Debt (public authorities’ debt outstanding, new debt issued and debt retired in the selected fiscal year).