Aug 26th - 11:51 am
The upstate employment picture is worse than the rest of New York and the country following the official end of the recession, according to a report issued on Friday by Comptroller Tom DiNapoli.
Since 2009, employment in upstate New York rose by less than a full percentage point, 0.3 percent.
In the New York City region, employment grew by 2.2 percent and nationally grew 1.9 percent during that same time period.
Still, it’s not all bad news: the average annual wage gain in upstate New York stands at 3.3 percent, outpacing both downstate and the national average last year
Overall, the report issued by Comptroller Tom DiNapoli paints an uneven picture for upstate’s economic situation, which has historically struggled behind the rest of the state for the last generation.
“On the surface, New York’s economy has rebounded from the Great Recession,” DiNapoli said. “But it should come as no surprise that a closer look reveals pockets of the state still have a long way to go to catch up.”
Gov. Andrew Cuomo has insisted upstate New York’s recovery is a priority, and his administration has spent heavily to bolster the economy through tax breaks and incentives to targeted high-tech industries.
Still, the largest employment growth during the time period of 2010 through 2015 was in leisure and hospitality, which increased by nearly 26,000 jobs. Education and health care employment grew by more than 20,000 jobs.
The steepest decline in job losses was in government, which decreased by 34,000 positions during the first half of the decade.
And in western New York, where Cuomo has focused much of his energies in boosting the jobs picture, the steepest decline was seen in public-sector employment — more than 6,500 jobs, the report found.
Nevertheless, the public sector remains upstate New York’s top employer, with 21 percent of all jobs in the region accounting for government work.
Updated: Cuomo spokesman Rich Azzopardi defended the administration’s efforts on upstate job creation.
“Under this administration, Upstate’ s unemployment rate has been nearly cut in half and has gained tens of thousands of new private sector jobs,” he said.
“While there is more work to be done, its inarguable that the arrows continue to point in the right direction and that is because of the Governor’s unprecedented focus on Upstate. Additionally, statewide income tax rates are lower at every bracket than in 2010 and the lowest middle class tax rates in 70 years were passed into law, as was, the lowest corporate taxes 1968, the lowest manufacturing tax rate since 1917, and a cap on property taxes – all of which make upstate more competitive.”
Aug 19th - 12:09 pm
Tax collections dropped in July by $1.1 billion or more than 4 percent over the same time last year, a July cash report from state Comptroller Tom DiNapoli’s office released on Friday.
The tax collections were $21.8 million over the latest estimates issued by the Division of Budget earlier in August. But in a troubling sign for the state’s economy, the collections are more than $500 million below initial projections due mainly to lower-than-expected collections from the personal income tax.
“Tax collections are well below initial projections, and the Division of the Budget has made adjustments,” DiNapoli said. “We still have eight months left in the fiscal year, and the state must be prepared to take action if necessary.”
Meanwhile, the state spent $47.2 billion during the first four months of the current 2016-17 state fiscal year, which is a $2.3 billion bump from last year over the same time period. Significant increases in spending inlcude public health programs as well as Medicaid, the July report found.
Total receipts for the state were at $47.9 billion, which were $108 million above the budget office’s August projects, but $989 million below the enacted spending plan’s initial estmiates.
Aug 16th - 11:20 am
At his blog on the Empire Center’s website, E.J. McMahon has some context for the 2 percent return on the state’s pension fund as reported by Comptroller Tom DiNapoli.
McMahon notes the fund’s first quarter performance ending June 30 tracks closely with the S&P 500, which grew by 1.9 percent during the same time.
Meanwhile, it will be a challenge for the pension fund to reach its 7 percent return as planned (DiNapoli acknowledged this in an interview on Monday).
From his post:
“With fully two-thirds of its money invested in domestic and foreign stocks, private equity and “absolute return strategies” (i.e., hedge funds), the New York State pension fund has a risky asset allocation profile typical of its counterparts across the country—because chasing risk is its only hope of earning 7 percent a year in a market where the most secure long-term bonds yield barely 2 percent,” McMahon wrote. “Although market indexes recent hit all-time highs, the Wall Street outlook remains decidedly mixed.”
In the same interview, DiNapoli said it is likely the contribution rates for local municipalities this year will remain flat after several years of declines.
Aug 16th - 6:45 am
From the Morning Memo:
Amid a challenging market place that includes economic uncertainty here at home and overseas, the state pension fund made modest gains during the first quarter of the state fiscal year.
“It’s been a tough investment climate, no doubt about it,” Comptroller Tom DiNapoli said in an interview. “There’s a lot of volatility in the markets.”
The pension fund produced a return of 2 percent during the first three months of the state’s current fiscal year, with a value of $181 billion.
That comes after a year in which the fund grew by less than one percent — one of its worst performances since the end of the recession.
“Two percent was certainly stronger than how we ended the year,” DiNapoli said. “We’re now up to $181 billion in total value of the fund. We’re already starting to see some recovery in the markets.”
Most states have struggled in recent months with their pension fund investments amid an overheated Chinese economy as well as the fallout from the vote by Great Britain to leave the European Union’s common market.
Interest rates in the U.S., meanwhile, remain low even as jobs numbers have rebounded and the stock market volume continues to post gains.
The health of the pension fund is key, especially for local governments and taxpayers. Last year, DiNapoli announced the percentage local governments contribute to the fund would decrease — saving them money in the process.
Last year, DiNapoli announced the state would once again reduce contributions from 18.2 percent of payroll to 15.5 percent. The average rate of contribution for the police and fire retirement system declined by 2 percent — from 24.7 percent to 24.3 percent.
But that’s unlikely to happen this year, he said.
“Where I think we’re headed — again, these are not the final numbers — is probably to essentially a flat or stable rate for the coming year,” DiNapoli said. “I don’t think we’re going to be able to have that decrease three years in a row.”
A formal announcement is expected sometime around Labor Day.
Local governments have struggled in the wake of the recession with depleted rainy day funds and a cap on property tax increases, while state aid hasn’t increased.
“Our goal obviously is to maximize those returns so we can bring down that contribution rate,” DiNapoli said. “It did spike up significantly after the market collapse. We know it’s been a burden on local governments.”
The target of hitting a seven percent return for the pension fund will be difficult, but isn’t impossible, he said.
“There’s no doubt it’s a lower return environment and I think in the short run it’s going to be a challenge to meet our long term number of seven percent,” he said. “But we’re a long term investor, we have confidence in the long term ability of our allocations to meet that number over the long haul.”
Aug 9th - 11:27 am
An audit released on Tuesday by Comptroller Tom DiNapoli’s office found the state paid out at least $12.1 million in inappropriate payments through the Medicaid system, including $2.3 million for patients who ha died.
The audit, covering the year 2015, also found several million dollars had been paid out under Medicaid to recipients who had been dropped from long-term coverage.
Only $2.1 million of the over payments has been recovered following the audit.
“My auditors continue to find glitches in the Department of Health’s payment control systems that allow wasteful payments to be made,” DiNapoli said. “The department agreed with most of our recommendations and is working to fix the problems we have uncovered. It should recover up to $10 million that should not have been spent.”
The Department of Health “generally agreed” with the recommended fixes to accounting within the Medicaid program, and plans to consider the 11 recommendations made by DiNapoli’s office following the audit.
The report found 119 people who had died had been enrolled by the DOH, while 1,177 deceased patients were not automatically terminated after they had been enrolled in the program. Medicaid overpaid 4,892 clais of more than $2.2 million for 966 enrolled recipients.
At the same time, auditors at the comptroller’s office found providers in the Medicaid program who had been charged or convicted of crimes violating the laws or regulations governing the health-care program. The Department of Health has terminated 26 of those providers, but the status of five additional providers is under review.
Aug 4th - 11:19 am
Revenue from local sales tax collections has lagged in the first six months of the year, increasing by only 1.7 percent, a report from Comptroller Tom DiNapoli’s office released on Thursday found.
Overall, growth in collections from the sales tax slowed from 2.6 percent in the first quarter of the year to 0.8 percent in the second quarter.
“While statewide sales tax revenues continue to rebound slowly, only some parts of the state are seeing growth,” DiNapoli said. “The slowdown in sales tax collection growth reflects a three-year trend. Collections trickle in the first half of the year, followed by more robust growth in the second half. And recent economic projections suggest that sales tax collections will pick up again in the second half of 2016.”
Overall, local sales tax collections increased by $130, but that was distributed unevenly across the state. The mid-Hudson region had the strongest growth at 2.7 percent, followed by the Finger Lakes at 2.5 percent and New York City recorded a 2.4 percent rise.
However, tax collections elsewhere suffered, with central New York seeing it decline by only 1.3 percent. In western New York, growth stood at only 0.7 percent and in the North Country only 0.1 percent.
Overall, sales tax collections increased in 34 counties out of 57 outside of New York City. Chautauqua County had the highest, 11.6 percent. The steepest decline was found in Hamilton County, where tax collections tumbled 6.8 percent.
Aug 2nd - 1:32 pm
New York City has a $4 billion surplus at the conclusion of its fiscal year on June 30, but a slackening economy could slow future tax collections, Comptroller Tom DiNapoli found in a report released on Tuesday.
“New York City’s finances have been boosted by strong economic growth and conservative tax revenue forecasts in recent years,” DiNapoli said. “While the city’s economy is doing well, there are reasons to be concerned about the future, including a slowing economy here and abroad. Mayor de Blasio’s cautious approach to FY 2017 is warranted given the economic risks ahead. I commend the Mayor and the City Council for increasing the city’s reserves in recent years.”
Tax collections in the city have slowed to 3.6 percent in 2015-16 fiscal year after increasing at an average rate of 6.9 percent over the last five budget years.
The city’s financial plan estimates tax collections will increase by 1.8 percent in the new fiscal year. Property tax collections are expected to increase, while non-property tax revenue will drop by 0.8 percent.
While job increases have exceeded the initial estimates by city budget officials, overall growth is slowing in the last two years. Tourism and retail have been impacted by a stronger dollar overseas and uncertainty in global economies. The financial industry, after two years of growth during the recovery, is once again downsizing.
Jul 14th - 2:03 pm
Comptroller Tom DiNapoli’s office on Thursday touted an independent report of the state’s pension fund, which found his office had “strong policies” in place for ethical management of the retirement system.
However, the report also noted concerns about the level of staffing and compensation at the comptroller’s office which could have “current and future consequences” on the fund.
The report conducted by Funston Advisory Services reviewed more than 1,000 contract documents and interviewed comptroller staff and members of the office’s advisory committee. The firm also reviewed information related to new investments in the fund during the three-year review period.
“Since taking office, I have sought to establish our state’s pension fund as a leader in transparency, ethics and effectiveness. It’s gratifying to have an independent voice affirm our efforts,” DiNapoli said.
“Our staff has helped build one of the nation’s strongest pension funds, but only with competitive compensation and additional resources can we accomplish all that we need to do to manage the Fund effectively and efficiently. Our task going forward will be to expand and enhance our team and our internal expertise to better meet the challenges and risks of an increasingly volatile global market.”
The report concluded the management of the pension fund is “severely understaffed” given its size.
“In addition, independent compensation benchmarking indicates that [investment] staff compensation levels are in the bottom quartile for similar public pension funds,” the reoprt found. “There is justifiable concern that current staff will leave if compensation is not increased, and it is likely that [the Fund] will struggle to recruit needed new staff and stem turnover at current compensation levels.”
Jul 7th - 11:13 am
A report from Comptroller Tom DiNapoli’s office released Thursday found the state’s management of the Excelsior Jobs Program, which provides millions of dollars in targeted tax credits in exchange for job creation, hasn’t provided adequate oversight of the pledges made by private-sector companies.
The report comes days after the Empire State Development Corp., which oversees economic development programs in New York, quietly released a report on Friday that found a separate program, START-UP NY, has only produced 408 jobs in its two-year history.
The Excelsior audit was knocked by the Empire State Development Corp. in a statement, saying the comptroller’s office ignored “key facts” when reviewing the program.
But DiNapoli in a summary of the report urged the agency to take a more active role in oversight of the program.
“New York state gives away millions of dollars each year in tax breaks for companies that are supposed to create jobs and expand under the Excelsior program, but ESD’s oversight leaves a lot to be desired,” DiNapoli said. “ESD needs to stop lowering the bar and giving companies a pass when they fall short of promises. ESD needs to ensure these businesses are not taking advantage of state taxpayers.”
The Excelsior program was created in 2010 and provides refundable tax credits to businesses, with the promise of creating and maintaining jobs or for making capital investments.
The audit, which examined 25 companies, found that as of June 2015, received 39 tax credits of $4.8 million.
The audit found ESD had not exercised enough due diligence when approving any of the 25 selected companies when it came to participating in the Excelsior program. At the same time, the agency failed to follow its own protocol for scrutiny in its applications.
The agency also did not provide auditors with documentation verifying the 25 companies met all of the required benchmarks for being included in the program.
Verification was similarly unavailable when it came to agreed-upon job targets, with benchmarks of five of the 39 tax credits.
The comptroller’s office is recommended a range of reforms to oversight of the program by ESD including ensuring all tax credit calculations are correct before actually issuing he credits and limit modifications to annual job growth and investment requirements.
In response to the audit, ESD spokesman Jason Conwall insisted the comptroller’s report was flawed.
“Any truly objective review would show this program is cost-effective, performance-based, and incentivizes business growth by only providing tax credits to those that have achieved their job commitments and investments,” Conwall said.
“The reporting requirements to this agency, as well as to the Department of Labor, are rigorous and companies have to demonstrate to ESD that they met their job commitments before any credits are issued. To be clear: auditors did not find a single instance where incentives were improperly provided. They also apparently ignored the success of this program, which, to date has admitted 434 businesses that have committed to create more than 44,445 new jobs, retain nearly 158,000 existing jobs and invest $4.2 billion.”
Jun 29th - 11:27 am
Comptroller Tom DiNapoli announced Wednesday his office would begin an immediate review of the pension fund’s investment portfolio to determine if there are any firms with ties to the effort to boycott, divest and sanction Israel.
The move from DiNapoli comes after Gov. Andrew Cuomo announced the state would move to curtail the “BDS” movement through a boycott of companies and other entities that participate in the campaign.
“Attempts to harm Israel’s economy can put our investments there at risk,” DiNapoli said. “Israel remains an attractive place to invest and we look forward to finding new opportunities there. We’re putting companies engaged in BDS activities on notice that there will be consequences if their anti-Israel activities expose our investments to financial harm.”
The pension fund has about $532 million in Israel-related investment opportunities. DiNapoli also visited Israel in November 2015.
Companies that are determined to be involved in BDS activities will be added to a restricted list blocking investment. A firm that is being invested in by the pension fund that’s involved in the BDS movement will be placed under review and could have their relationship ended.