Should it stay or should it go? That's the question New York City and state officials are asking about the Financial Control Board, an oversight body created 30 years ago to help the city recover from a fiscal crisis after it had been shut out of the capital markets.
The board was created under the Financial Emergency Act of 1975, which was originally set to expire in 2008. But last week state Comptroller Alan Hevesi, a member of the board, announced his support for its extension for another 30 years.
In August 2003, the state Legislature agreed to assume the cost of outstanding bonds issued by the Municipal Assistance Corp. during the fiscal crisis. At the same time, the Legislature extended the life of the control board for 30 years, Hevesi said.
This is because lawmakers added into the Financial Emergency Act language saying the act will terminate either on July 1, 2008, or when no New York City bonds remain that carry the pledge of the FEA, including general obligation bonds, whichever is later. Some city bonds with the FEA provisions included in their bond covenant won't expire for another 30 years.
"Thanks to the state Legislature's foresight, the board will be around for another 30 years," Hevesi said in a statement. "It's good public policy and it's good fiscal policy."
Not everyone agrees that the board should stay. Assemblyman Herman D. Farrell Jr., D-Manhattan, introduced legislation to correct what the bill calls the "apparent technical error" of the language inserted into the FEA legislation in 2003. The bill also calls for a clarification that the FEA will definitely terminate on July 1, 2008. The Assembly has not yet voted on the bill.
