What are public authorities?
Public authorities (sometimes called “public benefit corporations”) are quasi-public entities created to manage infrastructure projects, economic development programs, and other government initiatives. Their structure is similar to that of private corporations, with boards of directors overseeing management and operations pursuant to adopted bylaws. Unlike private corporations, however, public authorities do not have shareholders and their board members are appointed by elected officials.
There are currently more than 500 public authorities in New York State, including state-level authorities such as the Urban Development Corporation and the Thruway Authority, as well as local public authorities such as public housing authorities, industrial development agencies, and local development corporations. These authorities have various powers and levels of autonomy depending on the purposes and restrictions built into their enabling legislation.
Most authorities are authorized to issue bonds without voter approval in order to develop and maintain infrastructure, such as roads and schools, or to fund projects for public agencies or private parties. The debt service for these bonds is usually supported by project revenues, such as tolls levied by bridge and tunnel authorities, but some authorities rely on appropriations from the legislature. The state may also assign specific revenue streams to an authority as a way for the authority to pay its debt service.
Although public authorities are subject to financial reporting requirements and other oversight measures under state law, they are not required to comply with the same regulations that apply to public agencies. This allows public authorities to bypass government bureaucracy and red tape, ideally resulting in more efficient and expedient operations. But it has also created a perception that public authorities are part of a “shadow government,” issuing debt and handling day-to-day operations outside of the normal protections intended to ensure that tax dollars are used without waste and for the benefit of the public. Reform measures enacted over the last decade have attempted to address these issues with stricter transparency and accountability requirements.
The general rules and regulations governing public authorities in New York can be found in the Public Authorities Law.
Other useful resources include the following articles and reports:
- New York State Authorities Budget Office, 2011 Annual Report on Public Authorities
- Lynn Wilson and Clayton Eichelberger, New York State Public Authority Reform: Where We Have Come From and Where We Need to Go (2009)
- Scott Fein, Public Authority Controversies: Root Causes and Lessons Learned (2009)
- Bennet Liebman, Assessing the Fourth Branch of Government: The Benefits and Challenges of Public Authorities in New York State(2005)
- Jonathan Rosenbloom, Can a Private Corporate Analysis of Public Authority Administration Lead to Democracy?, 50 N.Y. L. Sch. L. Rev. 851 (2005-2006)
- Clayton P. Gillette, Public Authorities and Private Firms as Providers of Public Goods, Reason Foundation Policy Study No. 180 (1994)
- Donald Axelrod, Shadow Government: The Hidden World on Public Authorities—and How They Control Over $1 Trillion of Your Money (1992)
- Moreland Act Commission, Restoring Credit and Confidence: A Reform Program for New York State and its Public Authorities (1976)
- William J. Quirk & Leon E. Wein, A Short Constitutional History of Entities Commonly Known as Authorities, 56 Cornell L. Rev. 521 (1971)