DiNapoli: EPF Paying Out And Paying Off

Money being spent from the state’s Environmental Protection Fund are at an all-time high, a report released Monday by Comptroller Tom DiNapoli’s office found.

While that has meant more money for open space and water quality, it’s also meant spending for future years will be needed in order to provide additional resources for the fund, the report found.

“Twenty-five years ago, the state established a permanent fund with dedicated revenues to protect New York’s environmental, recreational and other natural resources,” DiNapoli said. “Historic high levels of EPF spending in recent years underscore the fund’s vital role in preserving the environment for all New Yorkers. We must ensure its sustainability as a dedicated funding stream to continue investment in these precious resources for future generations.”

Environmental groups have praised the successful push to boost spending at the EPF, which has reach a record appropriation of $302 million. A virtually similar appropriation has been included in the proposed budget.

Average disbursements are estimated to stand a $242.4 million over the next six years.

Nevertheless, concerns include transferring money out of the fund and some, nearly 15 percent, hasn’t been replenished.

Here’s the full report:

epf-report-3-2-18 by Nick Reisman on Scribd

DiNapoli Finds Contracting Problems At SUNY Campus Foundations

Comptroller Tom DiNapoli’s office found 10 of the campus foundations at the 30 state public colleges and universities were operating without contracts required while they oversee billions of dollars in donations and resources.

The report released Tuesday by DiNapoli called on SUNY administration to work with campus foundation organizations to ensure their contracts are executed on a timely basis and routinely evaluate relevant and available data to assess risk.

“We found numerous problems with SUNY’s oversight of its campus foundations. SUNY does not regularly examine the foundations’ books, and my auditors found instances of questionable expenses,” DiNapoli said. “SUNY administrators need to improve their oversight efforts to make sure billions of dollars are being handled properly.”

At the same time, 16 foundations have not been audited by SUNY’s administration since 2007. Auditors determine the administrators have not obtained or reviewed contract negotiations, nor have they developed interim contracts as a bridge.

All told, state-operated campuses have $2.1 billion in net assets since June 2015, when the most recent fiscal information was available.

DiNapoli Sues Wynn Resorts

Comptroller Tom DiNapoli has filed a lawsuit against Wynn Resorts, alleging top officials at the company knew of sexual misconduct and harassment by ex-CEO Steve Wynn, but failed to investigate or hold him accountable.

The comptroller’s office on Monday announced what is known as a derivative lawsuit that allows shareholders to file legal actions on the behalf of a corporation when its officers or directors have failed to meet their required fiduciary responsibilities.

“These board directors and officers were duty-bound to protect employees and the company, yet they failed to confront allegations of predatory behavior,” DiNapoli said. “We are asking the court to hold accountable the company officers and directors who allowed this behavior to go unchecked. The deeply disturbing revelations underscore that this board was loyal to Mr. Wynn at the expense of the safety of the company’s employees and the company’s shareholders.”

The lawsuit claims the board of Wynn Resorts knew of allegations against its former CEO since March 28 of 2016 and failed to act on reports of sexual abuse and harassment of his employees. Wynn, a prominent political donor in Nevada and nationally, stepped down as head of the Republican National Committee’s fundraising arm after the allegations surfaced earlier this year.

The state’s pension fund holds $30.4 million in shares in Wynn Resorts. DiNapoli’s office plans to use the pension fund’s leverage to vote against all incumbents nominated to serve on the board at the firm’s annual meeting.

Wynn Complaint by Nick Reisman on Scribd

DiNapoli Raises Checks And Balances Concerns In Budget Report

A budget analysis released Wednesday by Comptroller Tom DiNapoli’s office raised concerns over language in Gov. Andrew Cuomo’s proposed $168 billion budget that could weaken checks and balances over public spending.

The report, an annual analysis of the governor’s budget proposals conducted by the comptroller’s office, found language that grant power to the budget to reduce spending by up to 3 percent if tax revenue falls below $500 million or more.

Another provision would expand the powers of the budget director to impose spending cuts without action by the Legislature should federal reductions occur.

Cuomo has repeatedly raised concerns with the possibility of federal cuts being imposed on the state that could throw aid out of whack and make budgeting less predictable. Cuomo last year went as far as to suggest switching to a mode of continuing budget resolutions, similar to the model used by Congress, due to the uncertainty.

More than one in every three dollars in the budget proposal is backed by federal spending.

DiNapoli also found broadly authorized shifts in funding and spending authority among state agencies.

“It is a high-pressure year for the state budget. Decisions made in Washington pose a real risk to New York’s finances. Cuts from Washington, questions over state tax revenues and billions of dollars in out-year gaps pose significant threats,” DiNapoli said. “At a time of difficult financial challenges, transparency, accountability and oversight in the use of public dollars are more important than ever.”

A lack of tax revenue is also making things more complicated: The all-funds receipts are estimated to be $77.4 billion in the 2018-19 fiscal year, which begins April 1. That’s a decline of 2 percent, or $1.6 billion.

The decline is due in large part to the speeding up of some personal income tax payments into the 2017 tax year in response to federal changes, according to the Division of Budget.

Executive Budget Report 2-13-18 by Nick Reisman on Scribd

DiNapoli Says Pension Fund Stands At $209B

The state’s pension fund in the third quarter of the fiscal year reached an estimated value of $209.1 billion, Comptroller Tom DiNapoli’s office on Monday annonuced.

The fund’s rate of return was 4.12 percent.

The report comes as the stock market is facing a period of uncertainty amid gyrations that have seen stocks rise and plummet within a single day.

“A strong equities market continued to provide solid returns on investments during the last three months of 2017,” DiNapoli said. “Notwithstanding recent volatility, we have welcomed the stock market’s nearly decade-long rise. Our foremost goal will always be to find stable, long-term returns that will continue to provide retirement security for the pension fund’s more than one million members, retirees and beneficiaries.”

The fund’s value at the end of the previous fiscal year, March 31 of 2017, stood at $192.4 billion.

DiNapoli: Tax Bill ‘A Bad Deal’ For New York

The tax bill being voted on in Congress today is remains a “bad deal ” for the state that will make the state budget all the more difficult, Comptroller Tom DiNapoli warned Tuesday in a statement.

DiNapoli in a statement said the plan to cap state and local tax deductions at $10,000 would force cuts to programs such as Medicare and put spending at risk in other areas, such as the Social Services Block Grant, federal highway aid and the Consumer Protection.

The state impact is more acute. The budget this coming season is due to have a deficit of at least $4 billion.

“The legislation will drive up the cost of borrowing for state and local governments’ capital investments by eliminating the option for advance refunding of outstanding debt,” DiNapoli said. “In the past four years alone, this option has generated approximately $1.1 billion in total long-term savings for the state. Local governments, school districts and public authorities in New York have achieved similar savings.”

DiNapoli urged the state’s delegation to Congress to vote against the bill. So far, several Republicans in the House have indicated they will vote down the bill even as it is poised to be approved.

“I urge members of New York’s Congressional delegation to oppose this deeply troubling legislation,” DiNapoli said. “It has far-reaching and negative implications both for our state’s economy and for individual New Yorkers all across the state.”

DiNapoli Sounds Debt Alarm

The state’s debt is expected to hit nearly $64 billion at the end of March and soar to $71.8 billion in the next four years — making it the second-highest debt load among the states in the country, Comptroller Tom DiNapoli on Thursday warned in a report.

Gov. Andrew Cuomo’s administration pushed back on the report, insisting in a state released by its budget office that the state’s debt actually declined.

DiNapoli’s report pointed to a combination of state-funded, voter-approved and state supported debt as well as debt taken on by entities like the Dormitory Authority, all of which have increased. Of those, what has declined is voter-approved debt, expected to reach $2.46 billion, a 6.1 percent decrease from 10 years ago.

When combined, however, those debt loads are expected to reach $63.7 billion by March 31 of next year, the final day of the fiscal year in New York.

“New York faces tremendous infrastructure challenges and the wise use of debt can be an essential part of the financing picture,” DiNapoli said. “Still, backdoor borrowing imposes significant costs on taxpayers, lacks transparency and may limit flexibility in providing important services and programs. My debt reform proposal would help ensure effective capital planning and manageable debt levels.”

The current per capita debt for the state is $3,116, or three times the median in all states. Annual debt service payments are projected to be mroe than $8.2 billion in the 2021-22 fiscal year.

The state does have a borrowing cap, but it’s expected to shrink to $58 billion by the 2020-21 fiscal year.

New York’s debt load is second only to California’s $87 billion, the report found. As a percent of personal income, it’s at 5.1 percent, second only to New Jersey.

The Division of Budget, an arm of the Cuomo administration, pushed back on the report’s findings.

“This report does not adhere to generally accepted accounting principles and includes debt that is not recognized as the responsibility of the State on OSC’s own financial statements,” said spokesman Morris Peters. “The fact is, New York’s debt has declined for five consecutive years for the first time in history and our debt to personal income ratio is at the lowest level since the 1960s.”

The report backed an amendment to the state’s constitution that would limit state-funded debt to 5 percent of personal income within the next 10 years in order to appropriately plan for the reduction.

Another amendment should ban the issuing of state-funded debt by public authorities and other similar entities.

And DiNapoli believes the state should create a council to study capital assets and infrastructure that monitors public authorities.

Debt Impact Study 2017 by Nick Reisman on Scribd

DiNapoli Sees Budget Dominoes In 2018

A cascade of fiscal challenges awaits New York in 2018 that could ultimately snowball into fiscal headaches for local governments, Comptroller Tom DiNapoli on Monday warned during a stop in Glens Falls.

“I think we’re going to be in for a very, very tough budget process next year and a long-term changed landscape, not for the better, for New York state and our municipalities,” he said.

DiNapoli pointed to the negative impact that’s in store for New York should a tax overhaul package be approved in Congress by the end of the year.

At the same time, the state faces a $4.6 billion budget gap as revenue has slowed. DiNapoli added the state sends more in tax revenue to the federal government than it receives back in services.

“I see New York as a net loser,” he said. “It’s going to put a lot pressure on the state budget at a time when our revenue has also been falling short. By extension, that’s going to put a lot of pressure on state programs that support our local cities and our school districts and municipalities.”

The budget is expected to pass by the end of March, before the fiscal year starts on April 1.

How To Sum Up Budget In 2018? ‘Concern’

Comptroller Tom DiNapoli on Monday summed up his thoughts on the looming budget troubles in one word.

“Concern,” he said. “It certainly confirms what we’ve been saying, that tax collections are coming in lower than anticipated. So we see continued lowering of projections, and we’re still falling short.”

Revenue from taxes is shrinking, coming in lower than budget officials expected. Nevertheless, a main driver of the state’s economy — Wall Street — is doing well. DiNapoli says the problem is an uneven economic recovery.

“It’s a different picture depending on which part of the state that you’re in,” DiNapoli said. “So while the downstate counties are doing relatively well, we have upstate counties that are not.”

New York’s budget deficit heading into the new year is as high as $4.6 billion if spending continues at current level. And even if spending is capped at a 2 percent increase, the deficit is $1.7 billion. That means less money is going to be available next year.

“The Legislature and the governor are going to have to make some very tough decisions on spending as we head into the budget cycle next year,” DiNapoli said. “I urge everyone to lower their expectations on how much money is going to be available to spend.”

Meanwhile, New York could be impacted in the future if Congress ends deductions for state and local taxes. While upper income earners could take the biggest hit, there would still be problems for the middle class.

“I really think the concern is what’s happening to the middle class in all of this,” DiNapoli said. “That’s why you have many Republicans in our own state who are saying this is not appropriate.”

Five Republicans from New York voted against the tax bill in the House of Representatives. Rep. Chris Collins wasn’t one of them, saying the state needs to get its own fiscal house in order.

“We’re living in the highest taxed, most regulated, least business friendly state than any other in the nation — a population continuing to decline,” Collins said.

Still, New York Republicans are worried. Rep. Peter King of Long Island on Sunday urged President Donald Trump to intervene and keep the deductions intact.

DiNapoli: State ‘Faces Serious Fiscal Challenges’

A report released on Tuesday by Comptroller Tom DiNapoli’s office raised alarms over the state’s budget picture, finding lower tax revenue and a $4.1 billion budget gap.

The report, assessing the first half of the state’s 2017-18 fiscal year, found tax collections totaled $36.1 billion, or $386.6 million below estimates. At the same time, the state’s fund balance stands at $6.5 billion, or $21.8 million below the latest projection from the state’s financial plan, and $3 billion below the balance from a year earlier.

“New York faces serious fiscal challenges. Projected budget gaps, weaker than expected personal income tax collections and cuts to federal programs combine for a triple threat of budgetary risks,” DiNapoli said. “Any federal funding reductions not already assumed in the Financial Plan could force difficult decisions regarding the funding of important programs and services.”

Collections from the personal income tax reach just under $22.2 billion, a decline of $1.3 billion. DiNapoli cautioned that some collections could be influenced by potential tax law changes.

Gov. Andrew Cuomo has previously sounded a note of caution over the coming budget season will be a difficult one given the deficit that would need to be filled amid an election year. The state’s fiscal year begins April 1.

2017 18 Midyear Report by Nick Reisman on Scribd