No Control for the Authorities

Taxpayers won a partial victory last week, when the “New Mexico Finance Authority agreed to let the spaceport for one year use extra money from the taxes that shoppers pay in two Southern New Mexico counties. But the spaceport wanted the excess tax money in perpetuity, a proposal that the finance authority declined to grant as its chairman raised questions about the facility’s financial strength.”

We won’t waste Errors of Enchantment readers time with a lengthy re-hash of the disaster that is “Spaceport America.” (Some of our recent work can be found here, here, and here.) But the NMFA’s decision is a reminder that Sierra County‘s white elephant is under the control of the New Mexico Spaceport Authority, which gets its revenues from “public” sources.

Coincidentally enough, last week also saw the release of a legislative audit of Utah’s community of “limited purpose entities.” The investigation found weak internal controls, board members and staffers “who lacked the qualifications and training necessary to protect against waste, fraud and abuse,” and organizational cultures that do “not support good governance and accountability.”

Public-benefit corporations, quasi-public agencies, public authorities — call them whatever you prefer. But for decades, the entities have been found to suffer from severe transparency, accountability, and management problems. In the Land of Enchantment, one needn’t look far for examples beyond the spaceport authority’s follies. Special tax districts are an area of particular concern. The state fairgrounds, under the control of the New Mexico Exposition Center Authority, have “suffered from decades of neglect and deferred maintenance,” according to the Legislative Finance Committee. Housing authorities have been riddled with sleaze and malfeasance. (In 2007, the shady fiefdoms faced a complete overhaul by the legislature and then-Governor Bill Richardson.) More recently, the board of the Taos County Housing Authority was dissolved, due to an embezzlement scandal, and the Cimarron Housing Authority was taken over by the state when “evidence of numerous management problems … ranging from falsified income information to incorrect budget paperwork” came to light. And then there’s the perpetual political football that is the New Mexico Legislative Lottery Scholarship.

In Shadow Government, former New York budget official Donald Axelrod wrote: “Freed of control and surveillance, and insulated from the voters, many public authorities are quagmires of political patronage, corruption, and mismanagement.” While it’s relatively easy to get data about the executive, legislative, and judicial sectors, what some have called the “fourth branch of government” often wallows in murkiness. As Axelrod put it, “information on public authorities is sparse, fragmentary, and scattered … . They are the terra incognita of government.”

New Mexico’s taxpayers would benefit from a Utah-style exploration of the “somewhat hidden nature of … governmental non-profit organizations that are either sponsored by or closely affiliated with government agencies.” Anyone up to it?