State Unions Oppose Move Of 'Economic Development'

KENNETH BRYNIEN: DED serves public interest best.

The leaders of the two biggest stateemployee unions, the Public Employees Federation and the Civil Service Employees Association, testified before the State Legislature to protest the merging of two state agencies into a public benefits corporation because it would afford less oversight.

As part of his plan to plug a $13-billion deficit, Governor Paterson has proposed to merge the Department of Economic Development and the Foundation for Science, Technology and Innovation into the Empire State Development Corporation, a public benefits corporation that is not overseen by the State Legislature.

'Ultimate Shadow Agency'

"He's creating the ultimate offbudget shadow agency," said Kenneth Brynien, the president of PEF.

CSEA President Danny Donohue said, "At a time when taxpayers should be demanding more accountability and transparency in government, the Governor's plan will only move us deeper into the shadows."

Both union leaders said it made more sense to roll the Foundation for Science into the Economic Development Department. CSEA spokesman Stephen Madarasz said, "We're not arguing that there might not be some savings, but do it in a way that ensures it is in the public interest. We are not opposed to the concept of consolidating these agencies."

DANNY DONOHUE: 'Don't move deeper into shadows.'

A spokesman for the Division of the Budget, Matt Anderson, said it was hard to argue against the savings the Governor's plan would bring. He added that the planned merger made the most sense because the two state agencies were being folded into one that shared some similarities.

"These are agencies with overlapping missions," he said, before adding the state could not haphazardly place the two agencies anywhere it wanted. "We have to look at ways to save money when the state is facing an unprecedented deficit."

Unions: DED More Effective

Union leaders, though, told legislators that an expanded Department of Economic Development was the way to go. "Placing DED at the helm of a merged economic development agency would ensure a more cost-effective, accountable and transparent entity," Mr. Brynien said. "The public interest would be safeguarded by the DED's leadership and staff, ensuring that economic development resources are invested wisely and ethically."

Department of Economic Development Policy and Budget Economist Katherine Kazanas expressed concern that because of the merger she might lose her civil service status, which she has held for 15 years. Mr. Madarasz and Mr. Anderson both insisted that would not occur despite a transfer of employees to a public benefits corporation. "Under the proposal, all individuals with civil service protection would retain that after the merger," said Mr. Anderson.

Ms. Kazanas, a PEF shop steward, also was troubled by the potential loss of outside oversight of her agency. "I see this as important," she said. "Something has to be in place where government action can be accountable." A state agency is accountable to the Legislature and the Comptroller, but a public benefits corporation is only accountable to its board of directors.

'Goes in Wrong Direction'

"We have to stop transferring power to these unelected, unresponsive bureaucracies," Westchester Assemblyman Richard Brodsky said. "The decision on who gets tax breaks, who issues debt and who gets taxpayer money are questions for elected officials. This proposal is leading us in the wrong direction."

Ms. Kazanas said the proposed merger would result in the elimination of 80 of the Department of Economic Development's 197 positions and do away with all 26 Foundation jobs.

"The elimination of a constitutionally established state agency and transferring its authority to a public corporation is without precedent," the shop steward wrote in a letter to this newspaper. "It should be of great concern to all civil service employees."