Inside Albany’s secretive slush fund

by Kenneth Girardin |  | NY Torch

Version 2The Cuomo administration and the state Legislature have begun dishing out grants from a secretive $1.1 billion capital slush fund—all of which will be borrowed money.

As examined here previously, the State and Municipal Facilities Program (SMFP) was originally created by lawmakers in 2013 as a $385 million pot financed by state Dormitory Authority bonds. Lawmakers doubled that borrowing and spending authorization a year later, and added yet another $385 million to the appropriation in the latest state budget.

No further details of the program or its parameters were made public with the budget. However, data obtained by the Empire Center under the state Freedom of Information Law (FOIL) provide a summary of 588 projects, totaling nearly $187 million, that have either received or are in the process of receiving SMFP funding. The list can be downloaded as a PDF here.

The proposed and approved projects are a veritable pork-barrel wishlist, calling to mind the kind of stuff that used to be funded by the multi-billion-dollar, bond-financed Community Enhancement and Facilities Assistance Program (CEFAP)— a “capital pork” binge started by the Legislature and then-Gov. George Pataki in the late 1990s.

Fewer than 10 percent of the projects on the initial SMFP list appear to involve core infrastructure improvements such as road, bridge, sewer or water system repairs. The rest of the list is dominated by “economic development” projects and highly localized community amenities ranging from dog parks and playgrounds to private hotel renovations and zoo exhibits.

Some of the bigger-ticket items include $5 million to CBS to renovate the Ed Sullivan theater for the new Stephen Colbert talk-show (needed, supposedly, to keep “The Late Show” in New York), $35 million to house SUNY Polytechnic’s silicon carbide facility and $15 million for the “Central New York Hub for Emerging Nano Industries” in Oneida County. The program is also adding $25 million to the state’s debt to support construction of a $350 million shopping mall on Staten Island.

The original State and Municipal Facilities Aid appropriation was targeted to capital improvements on government-owned property, but lawmakers have continued to stretch it to cover a growing list of wants. In 2014, the program was expanded to cover “economic development projects” that would “create or retain jobs in New York state,” opening the door for the program to dish out borrowed money to private businesses (such as the Ed Sullivan theater renovation). The Capital Plan indicates the latest $385 million will be spent entirely on economic development, itself a highly elastic category.

Unfortunately, the public’s knowledge of the program ends there. Nothing in the law explains how projects are or will be selected. The State and Municipal Facilities Aid slush fund apparently isn’t subject to the added disclosure and accountability guidelines applied to standard pork barrel “member items” at the recommendation of then-Attorney General Cuomo in 2008.

There is no way of knowing who sponsored the SMFP applications, who is approving the projects, or how the money is being allocated between the governor and the Legislature, or among lawmakers themselves.

And the list linked here, released to the Empire Center on July 31, four months after we filed our first FOIL request, apparently already is out of date. For example, it does not include a recently announced $10 million water system grant to the city of Syracuse.

The FY 2016 Enacted Capital Financing Program and Financing Plan indicates that only $13 million in SMFP funds actually had been spent through fiscal 2015, that another $85 million will go out the door in fiscal 2016, and that the Division of the Budget expects the remaining $1 billion to be spent over the following four fiscal years.

The Dormitory Authority is on pace to dispense thousands of these grants over the next five years—and the only thing taxpayers are now sure to see is the bill, with interest.



- Kenneth Girardin is the Communications and Marketing Manager at the Empire Center for Public Policy.