New York State contracts shouldn't be a gravy train for execs
New York State Seal Credit: State of New York
When New York taxpayers spend to help people in need, the money shouldn't be hijacked to pay excessive salaries to executives.
That's the perfectly reasonable premise behind Gov. Andrew M. Cuomo's recent order capping at $199,000 the state money that contract agencies and companies can use to pay individual executives. It also requires that at least 75 cents of every tax dollar go for services when the order takes effect this spring, rising to 85 percent by 2015.
Tightening the screws on pay and administrative costs is timely. The sluggish economy and pinched state budget make it imperative to get maximum value for every dollar.
The state does business with 140,000 nonprofit and for-profit service providers. When an Assembly task force looked at what providers pay executives, it found some startling excesses. One for-profit company in Syosset that provides preschool special education services paid its CEO more than $2 million a year.
Organizations that contract with the state will still be able to pay executives more than $199,000. For instance, large hospitals that get most of their revenue from private insurance companies won't be compelled to cut executive compensation. But the state won't pay any more than $199,000 for any individual executive.
Small contractors that get most of their revenue from the state will feel the pinch. What's important is that more of the tax dollars spent will deliver services rather than fat paychecks.
