Originally published: June 7, 2018
Bills have already passed State Senate 62-0 and 60-2 Would increase transparency of state business subsidies and fairness of economic development contracts
(Albany) Representatives from leading progressive groups joined with government and fiscal watchdogs today and called on Assembly Speaker Heastie to allow a vote on bills that increase the transparency and accountability of state business subsidies. The bills have already passed the Senate with overwhelming bipartisan support.
The Database of Deals would increase the transparency of the state’s $4B in annual spending on business subsidies. The comptroller’s Procurement Integrity Act restores and extends the comptroller’s authority to independently review state contracts and act as an independent referee to ensure rules, including MWBE rules, are followed.
State economic development programs have been under scrutiny since a scandal involving the alleged rigging of over $1 billion in state economic development contracts in Central and Western New York. The trial of Alain Kaloyeros, former head of SUNY Polytechnic, and executives at developers LPCiminelli and COR begins this month.
The Assembly included the Database of Deals (A.8175-A & S.6613-B) in its one house 1 budget bill in March, and the bill, which is sponsored by Buffalo-area Democrat Robin Schimminger, now has 38 co-sponsors in the Assembly. In 2017, Speaker Carl Heastie backed the comptroller’s program bill (A.6355-A & S.3984-A), which has 40 Assembly co-sponsors, saying:
“The people of the state of New York will still feel better knowing that there’s some other entity looking at it, like the state comptroller….. Another set of eyes will make people feel better that, yes, things are done correctly.”
The Database of Deals is a fundamental transparency reform listing all of the taxpayer subsidies received by a corporation including the type of subsidy, jobs created or retained, and the cost per job to taxpayers. The state spends $4 billion in economic development annually yet the public has no way of accounting for which programs work best, and whether the state is getting a sufficient return on its investment in jobs produced or retained or capital investments. An analysis by Reinvent Albany showed the taxpayer cost per job subsidized varies wildly from project to project, with the Governor’s signature projects building factories providing a terrible bang for buck at a half million dollars a job. Florida, Maryland, Indiana and New York City, among others, have a Database of Deals.
The Procurement Integrity Act was introduced at the request of Comptroller DiNapoli to restore the comptroller’s authority to review contracts before they are executed for SUNY/CUNY construction and construction services, materials and printing contracts, and OGS centralized contracts. The bill also:
- Requires comptroller approval of state-funded SUNY Research Foundation contracts of over $1 million;
- Forbids state-controlled nonprofit organizations from contracting on behalf of the state unless specifically allowed by the legislature (State-controlled nonprofits like Fort Schuyler Management Corporation bid-rigging scandal).
- Requires state authorities to use procurement guidelines consistent with state agencies.
The groups believe independent oversight is the only way to guarantee basic fairness to state vendors, including MWBE firms and small businesses. The comptroller’s review of existing contracts has already stopped 334 contracts and transactions valued at $920 million in the first two months of 2018 due to errors, improprieties, and lack of documentation. The average review of contracts took just 7.5 days in 2017.
Ron Deutsch, Fiscal Policy Institute, 518-469-6769
John Kaehny, Reinvent Albany, 917-941-9865
Jessica Wisneski, Citizen Action of New York, 845-901-0264
Jasmine Gripper, Alliance for Quality Education, 347-301-6277
Ethan Geringer-Sameth, Citizens Union; 914-715-0887
Susan Lerner, Common Cause New York; 917-670-5670
Jennifer Wilson, League of Women Voters NYS; 518-465-4162
Blair Horner, NYPIRG; 518-727-4506
Michael Kink, Strong Economy for All, 518-527-2787
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