$800 Million Eludes Overhaul

ALBANY — The budget overhaul Governor Spitzer signed into law this month leaves $800 million in borrowed money for projects allocable at the sole discretion of himself, Assembly Speaker Sheldon Silver, and Senate Majority Leader Joseph Bruno.With much fanfare, Mr. Spitzer last week signed legislation prohibiting lump-sum appropriations, the large pools of cash and debt that the governor and the two legislative leaders divvy up and bestow on their favorite civic groups and causes.The new law requires that certain pots of money be itemized — such as the $200 million-a-year “member items” cash fund that the governor and lawmakers dole out to nonprofits, schools, and corporations.But Messrs. Silver and Bruno still have hundreds of millions of dollars to allocate from the 20 existing and little-known lump-sum funds that make up a pork system in Albany far more vast than the “member items” that have attracted the most political and press attention. Because the new law is being grandfathered in, Messrs. Silver and Bruno will be allowed to dole out the remaining cash under the same broadly worded Pataki-era agreements that gave them almost total discretion on how to spend the money.“You’re not going to tear up an MOU that was signed three years ago,” a spokesman for Mr. Spitzer’s budget office, Scott Reif, said.Before Mr. Spitzer took office, Governor Pataki and lawmakers rushed to spend money that had accumulated in these capital funds over the years. They didn’t spend all of it.In the last decade, Albany has funneled around $4.3 billion into these funds, according to outside budget analysts. Of that amount, roughly $3.5 billion has been allocated to projects, which leaves behind about $800 million that is unrestricted by the new legislation, according to the Center for Governmental Research, which is based in Rochester.“There is an argument that can be made that Spitzer should eliminate the remaining pots of capital pork that haven’t been spent from the budget,” a researcher for the Center for Governmental Research, Erika Rosenberg, said. “As far as I know, it’s never been done. I don’t know what kind of recourse the Legislature would have legally. The houses love to dole out this money. Our previous governor loved to dole out this money. And Spitzer may love to dole out this money. We don’t know.” Even after those pots are depleted, Messrs. Bruno and Silver could still have some leeway in giving out capital pork. According to Spitzer officials, any new capital money authorized will have to be lined out in the budget. Lawmakers, however, say the new legislation isn’t so strict. The lawmakers appear to have a different interpretation of a line item than does Mr. Spitzer.A spokesman for Mr. Bruno, John McArdle, said grants are lined out if they have an identified purpose and region. So, for example, the legislature could award money for nanotechnology development in Albany with out specifying the actual grantees. Mr. McArdle said lawmakers would now pass resolutions with a list of the grantees along with the budget. He said, however, grantees could be added to the list after the resolution is passed.Since Mr. Spitzer took office and permitted his budget office to release to a more detailed accounting of the capital funds, a fuller understanding of the scope and scale has become available.Last year, Governor Pataki and legislative leaders authorized more than $1 billion in lump-sum capital grants from 20 pots of borrowed money. With last year’s addition, Albany is now paying $400 million a year to pay off economic development debt service, an amount that is four times as much as the state spends on economic development operating aid.The capital money was approved under the same “memorandum of understanding” system that Mr. Pataki and Messrs. Bruno and Silver used to divvy up “member items,” the pet project earmarks paid for out of the budget.The three-way agreements specify the size of the pool and how the money is split between the Legislature and the executive, and vaguely describes its purpose. One agreement, for example, says the money should enhance the “quality of community life.”Much of the money consists of reauthorized debt from funds created years ago, such the Community Enhancement Facilities Assistance Program, a $425 million fund that was established nine years ago and became the model for distributing capital pork in ensuing years.In the last year, the fund granted $200,000 to the Irish Repertory Theatre in Chelsea, and $100,000 to replace the heating system at St. Edward the Confessor Catholic church near Albany, and $600,000 to improve the security system at the Metropolitan Museum of Art. In 2005, it gave $1.2 million to the Hickey Freeman Company Inc., a suit manufacturer based in Rochester. There is more than $80 million left in the fund.Another $200 million pot of money is for so-called multimodal grants, a funding source devised in the late 1980s under Governor Cuomo that was intended to pay for projects that did not fit neatly into funding categories for transit, rail, or highway. A prototypical example was a train and bus terminal connected to major highways.Over the years, the definition of “multi-modal” has been stretched, budget analysts say. Just last year, one assembly member from Rochester secured $750,000 in multi-modal money to pay for sidewalk enhancements on a major avenue.Last week, a Staten Island Democratic assemblyman, Michael Cusick, proposed a bill that would allow lawmakers to spend multimodal debt to prune trees adjacent to roads, highways, pathways, and bridges.Several of the pots stem from a $1.2 billion package approved in the 2002-2003 fiscal year. Messrs. Pataki, Silver, and Bruno split the money and used it to finance their own economic developments plans, often without any coordination.The Senate got $340 million, which it used for its “GeNYsis” biomedical grant program, for additional multi-modal money, and for a Community Capital Assistance Program that essentially functioned as capital member items. The 2006-2007 budget approved $49 million from that fund.The Assembly got $340 million, which it spent on a program called Restore intended to rebuild blighted inner-city areas. It also poured money into multi-modal grants and capital member items. The Legislature authorized $197 million from that fund in last year’s budget.The governor’s share was $520 million, which he used to finance his research-focused Centers of Excellence on state university campuses. The rest of the money went into the Empire Opportunity Fund, which functioned as the governor’s own pool of capital member items.Last year’s budget also included money for the Strategic Investment Program, which was created in the 2000-2001 fiscal year in a $225 million lump sum and split three ways. In 2003 Mr. Pataki allocated $4 million from that fund for the National Museum of Catholic History and Art, which is adjacent to Our Lady of Mount Carmel Church in East Harlem. Another $2 million from the governor in 2002 went to fund the Simon Wiesenthal Center’s New York Tolerance Center. The Assembly gave $250,000 last year for electric work on a Ronald McDonald house in Long Island, and another $250,000 in 2005 to the cancer center at Maimonides Medical Center in Brooklyn.The SIP fund still has more than $60 million waiting to be spent.

$800 Million Eludes Overhaul

$800 Million Eludes Overhaul

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