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New York City Comptroller
John C. Liu
|Contact : Sharon Lee , (212) 669-3747||April 20, 2010|
COMPTROLLER LIU’S TESTIMONY TO NYC CHARTER REVISION COMMISSION
Calls for new budgetary duties for Comptroller's Office, elimination of IBO, and change to Mayoral Succession Law Comptroller allots his speaking time to the general public
NEW YORK, NY – New York City Comptroller John C. Liu today will be submitting a number of recommendations to the New York City Charter Revision Commission relating to the Office of Comptroller and how it can better serve the people of New York City. Liu will submit his recommendations at a meeting of the Charter Revision Commission in Brooklyn, but will not offer public testimony, instead forgoing his speaking time so the general public could have more time to voice their concerns.
“I am presenting the Commission with my testimony for review and discussion,” Comptroller Liu said. “With so few hearings scheduled, the public needs every opportunity to testify. I will be happy to discuss my suggestions further with the Commission, but at a later time. For now, we should allot as much time as possible for the public.”
Among Liu’s recommendations to the Commission are ways in which City government can be more effective by fully utilizing the capabilities of the Office of City Comptroller including setting binding revenue projections for the City, changes to the Mayoral Succession Law, changes to bond issuance rules, and the absorption of the Independent Budget Office into the Comptroller’s Office. In addition, because the current system is contrary to City Charter law, Liu is advocating for the ability of the Comptroller‘s Office to set its own budget in order to truly act as an independent audit authority to better root out waste in government.
Comptroller Liu will be presenting further recommendations as it relates to other areas of City Government in the coming weeks.
The full testimony is below:
TESTIMONY OF NEW YORK CITY COMPTROLLER JOHN C. LIU AT A MEETING OF THE NEW YORK CITY CHARTER REVISION COMMISSION – 4/20/2010:
This Commission is tasked with an extremely important responsibility and I would like to thank the Commissioners for the opportunity to submit testimony today in order to identify ways that New York City Government can better function.
I am submitting for review a number of recommendations for the Charter Revision Commission as it relates to the Office of Comptroller within the context and objectives of our broader municipal government. In the coming weeks I plan on outlining broader recommendations, but at this time I would like you to consider these recommendations pertaining to duties and capabilities of Comptroller’s Office and how this Office can better serve the people of New York City.
COMPTROLLER TO SET BINDING REVENUE PROJECTIONS:
Last month I wrote a letter to this Commission asking that you grant the Comptroller’s Office the authority to set binding revenue projections for the City. So long as the Mayor has the unilateral authority to set the revenue projections, it is inevitable that an annual “budget dance” will take place. The Comptroller’s Office has the ability and expertise to set these projections, and having an independently elected official, such as the City’s Chief Financial Officer, assume this role would streamline the budget process and eliminate wasteful spending.
This idea of more objectivity, as from the Comptroller, in the budgetary process is one that has garnered supported on both sides of the aisle, as both City Councilman Vincent Ignizio and State Senator Diane Savino recently advocated for such a change at last week’s public hearing. I once again ask the Commission to seriously consider this change to the Charter.
COMPTROLLER’S OFFICE TO SET ITS OWN BUDGET:
Under the Section 93 (c) of the City Charter the Comptroller is required to comply with “Yellow Book Audit Standards,” otherwise known as generally accepted government auditing standards. The Yellow Book requires the audit organization to be independent and free of external impairments.
Simply put, having an independently-elected office such as Comptroller, which is mandated by charter to oversee and audit City government operations, beholden to the Mayor’s budgetary authority undermines the role of the Office.
The Mayor’s control over the Comptroller’s budget essentially gives those being audited with power over the auditors. This is an external impairment to independence which according to the Yellow Book, must be avoided in fact as well as in appearance.
Providing the Comptroller with control over its own budget can therefore be seen as necessary to comply with the City Charter and would result in the Office’s increased ability to root out waste in government.
This Commission should know that any budget setting model used by the Comptroller’s Office would be one of fiscal conservatism with the focus on maximizing the ability to identify areas of waste.
ABSORPTION OF IBO INTO COMPTROLLER’S OFFICE:
In an effort to conserve resources and eliminate redundancy in services, this Commission should consider granting the Comptroller’s Office the authority to absorb the Independent Budget Office as a working arm of its Bureau of Fiscal and Budget Studies. There is no question that these two agencies provide similar services, especially as it relates to the overview of the Mayor’s Budget. In reality, the Comptroller already acts as the “Independent Budget Office” in matters of reviewing the Mayor’s budget. A more fiscally sensible role for the IBO would be to augment the Comptroller’s Office in the area of budget studies.
CHANGE TO MAYORAL SUCCESSION LAW:
In an effort to preserve operational continuity in our City agencies, as recently editorialized by the New York Times, the Commission should consider amending the Charter to identify the City Comptroller as the public official who would temporarily assume the duties of Mayor, if he or she could no longer carry out the responsibilities of the Office. Having the City’s independently-elected Chief Financial Officer step in and assume the duties of Mayor for the brief period until the special election is the best option to ensure that vital services are not disrupted during what surely would be a time of tumultuous transition.
CHANGE TO BOND ISSUANCE RULES:
As you know, according to the current City Charter and various provisions in State Law, the Mayor and City Comptroller are jointly responsible for the issuance of New York City debt. However, during the past few years the Mayor has established several local development corporations under Section 1411 of the Not-for-Profit Corporation law with the authority to issue debt without the approval of the Comptroller.
Since State Law takes precedence over City Charter rules, an amendment cannot be an airtight reform vehicle. However, I am proposing a new Section of the City Charter that would seek to curtail the issuance of debt by these corporations, where repayment involves the commitment of City support or City resources, without the approval of the Comptroller. The proposed new Section 8d will proceed as follows:
“Not-For-Profit Corporations established to lessen the burdens of government shall not issue bonds, notes, or any type of obligations to be paid from revenues that would otherwise accrue to the City unless terms and conditions thereof have been approved in writing by the Comptroller.”
Requiring Comptroller approval of debt of these not-for-profit corporations would be consistent with existing approval requirements of the City’s General Obligation, Transitional Finance Authority, and Water Authority debt issuance.
I trust that you will take these suggestions and recommendations into serious consideration. I look forward to your input and will be presenting this Commission with additional ways our City can better function. Feel free to contact my office with any questions or concerns.
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