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Paterson suggests public, private partnerships

Staring at multibillion dollar budget deficits, Gov. David A. Paterson is looking to engage private companies in the operation of state assets, such as possibly highways and the lottery system.

The governor, who this week has been on a vacation on the west coast of Florida, will sign an executive order creating a commission to report on the possibilities for public and private partnerships in the state.

Paterson stressed the state is not selling any assets, such as bridges or roads. And top administration aides said the commission's ideas are not meant to represent short-term fiscal fixes; they insist no savings or revenues are expected for next year's red-ink budget. And, in a bow to one of Albany's most powerful special interests, they say any partnership ideas will be done with organized labor playing a role.

While the administration was quick to say what aspects won't be included in any future public/private partnerships, officials shied away from giving much in the way of specifics about what might be under consideration. Aides to Paterson say they did not want to prejudge the upcoming work of the 11-member commission, which will provide a preliminary report in 90 days.

For corporations interested in teaming up with the state, the governor was quick to point out a number of caveats: prevailing wage and labor standards must be in place and government oversight will be part of any partnerships. Potentially most troubling for possible investors is what the governor said in a release will be "protection of public employees" in any future partnerships.

The panel's executive director will be Samara Barend, who at age 26 in 2004 ran unsuccessfully against U.S. Rep. Randy Kuhl, a Republican, in Western New York's 29th Congressional District. In March, she was promoted to vice president of government affairs at STV Inc., a national engineering and architectural firm that has at least 10 current contracts with mostly state transportation agencies totaling at least $29 million, according to the state comptroller's office.

The hiring of Barend had to be approved by the governor's budget office because of a state hiring freeze brought on by the state's worsening fiscal problems. Administration officials said her salary has not yet been set.

The possibilities for leasing or partnership deals are many, and states around the nation have been turning to the private sector to help run everything from ports and prisons to highways.

Earlier this year, an effort failed in New York to essentially sell off future state lottery proceeds to a private entity to run a portion of the lottery; in return, New York would have gotten a big upfront payment. And private groups are likely to be interested in various infrastructure projects around the state, whether on the Thruway or a $16 billion bridge replacement plan in Westchester and Rockland counties.

"Public-private partnerships are not the only answer, but we need to honestly assess whether they can be part of the solution. I believe the private sector can be a source of innovation, allowing us to increase the value, efficiency and safety of assets like our aging infrastructure system," Paterson said in a statement.

The effort was praised by groups such as the Business Council and the New York State Association of Counties. But labor groups question the wisdom of the government's turning to the private sector after several weeks of the national government having to bail out private companies.

"We're very skeptical, particularly given the news of this week of some private sectors imploding. We're not sure it gives us any more confidence to give them any more opportunities to run our operations or our assets," said Stephen Madarasz, a spokesman for the Civil Service Employees Association, which represents state and local workers across New York.

e-mail: tprecious@buffnews.com

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