Comptroller

DiNapoli Calls On Feds To Strengthen Rail Safety

Comptroller Tom DiNapoli in a letter to federal transportation officials released on Monday called for the enhancement of rail safety measures to curtail oil spills and accidents, including having oil transporters be required to have sufficient insurance to cover cleanup costs.

“The potential for oil train accidents demands that we take every measure to avoid loss of life and financial loss,” DiNapoli said in a statement. “A major accident could impose not only tragic human costs, but loss of local jobs and tax revenues. The state has stepped up inspections, but incidents such as the recent derailment in Ripley, N.Y. demonstrate that the risk of a disaster remains a major concern. Federal regulators must do more to protect the taxpayers and communities of New York.”

In the letter sent on Monday to Transportation Secretary Anthony Foxx, DiNapoli pointed to the heightened concerns over the transportation by rail of oil through primarily upstate New York communities. Trains that haul hazardous or flammable materials run through 21 counties, mostly in upstate New York.

A review of financial regulatory filings by two of the major crude oil carriers in the state, CSX Corp. and Canadian Pacific Railway Limited, found varying degrees of insurance.

CSX is self-insured for $25 million per incident of what is deemed to be “non-catastrophic” property damage, such as a train derailment. For incidents such as floods and hurricanes, the company has insurance of up to $50 million per occurrence.

Canadian Pacific’s public filings did not include data on their levels of insurance.

Among DiNapoli’s recommendations include having federal regulators consider rerouting trains that carry hazardous materials around populated areas while also having companies consider designating additional municipalities to have slower operating speeds when trains are passing through them.

“The increase of crude oil transportation has unfortunately come with devastating consequences in many communities across North America,” said Marcia Bystryn, President of the New York League of Conservation Voters. “We applaud Comptroller DiNapoli’s efforts to ensure that crude oil transport companies, not taxpayers or local towns and villages, are financially responsible when something goes wrong.”

Foxx Usdot by Nick Reisman

Report: NY Has The Second Highest Foreclosure Rate

A report from Comptroller Tom DiNapoli released Monday found New York has the highest foreclosure rate in the country — a major issue for municipal governments squeezed for property tax revenue.

“Our communities are paying a big price when people lose their homes,” DiNapoli said. “We must continue efforts to help homeowners and implement solutions that support local governments’ economic recovery.”

One out of 21 home mortgages are in foreclosure, with Long Island and the Hudson Valley having the biggest impact on their tax bases in the aftermath of the recession.

At the same time, the problem is compounded by a rise in the number of so-called “zombie homes” or vacant and abandoned properties, which leads to local governments straining to collect taxes, water and sewer costs and contend with hazardous structures.

foreclosure0416.pdf by Nick Reisman

DiNapoli: Budget Details ‘Came Together Late’

Comptroller Tom DiNapoli was critical on Friday of the process by which the budget was agreed to, saying it “came together late” with little sunlight.

But DiNapoli also praised the agreements within the spending plan, that include an increase in the minimum wage and a 12-week paid family leave program.

The comptroller’s office plans to release its yearly analysis of the budget in the next few weeks.

“This budget reflects stronger economic times and assists individuals and families who have not shared equally in the state’s economic prosperity,” DiNapoli said in a statement. “The details of the budget came together late in the process and outside the public’s view, so more analysis is needed to examine the long-term impact of these spending decisions. My office expects to finish our analysis of the enacted budget in the coming weeks.”

The budget was approved in the state Senate after a 17-hour debate that lasted the evening and into the early morning hours. The Assembly is due to take up voting later this afternoon.

Pension Fund Moves To Invest In Northern Ireland

The state’s pension fund is investing $7 million in a Northern Ireland bank, Comptroller Tom DiNapoli on Thursday announced.

The investment from the fund is in the Bank of Ireland Kernel Capital Growth Fund, which was created in 2013 to aid Northern Ireland-based small and mid-sized businesses accelerate growth.

“We’re pleased to announce another investment in Northern Ireland’s dynamic economy that will provide a solid return for the New York State Common Retirement Fund,” DiNapoli said in a statement.

“Northern Ireland is on the move, as I saw firsthand during a recent visit. The peace process has opened doors and created economic opportunities for all communities. We’re proud to be able to play a part in Northern Ireland’s economic resurgence. This partnership will benefit our retirees, taxpayers and Northern Ireland for years to come.”

The pension fund’s investment in Kernel Capital is coming from a $115 million Emerging Europe Fund and was selected after an analysis from 57 Stars LLC, which oversees the fund.

Ultimately, the pension fund could make investments in Northern Ireland of up to $30 million.

“This significant investment by the New York State Common Retirement Fund demonstrates a solid commitment to helping Northern Ireland’s businesses grow and is a real endorsement of the strong entrepreneurial spirit which exists in Northern Ireland’s business community,” said First Minister of Northern Ireland Arlene Foster.

“In the last couple of years our economy has grown from strength to strength and this added investment, combined with Kernel Capital’s impressive track record of investing in high growth companies, will continue to support Northern Ireland’s thriving business community into the future.”

DiNapoli: Wall Street Bonuses Declined By 9 Percent

Bonuses in New York’s financial industry in 2015 declined by 9 percent on average to $146,200 while profits industry wide fell by 10.5 percent, Comptroller Tom DiNapoli found in a report issued on Monday.

But at the same time, Wall Street added jobs for the second straight year, presenting a brighter picture that may not last given the global volatility in the marketplace.

“Wall Street bonuses and profits fell in 2015, reflecting a challenging year in the financial markets,” DiNapoli said. “While the cost of legal settlements appears to be easing, ongoing weaknesses in the global economy and market volatility may dampen profits in 2016. Both the state and city budgets depend heavily on the securities industry and lower profits could mean fewer industry jobs and less tax revenue.”

The annual survey of the securities industry in New York is a key indicator for the state’s economic condition as a whole, which has recovered since the onset of the recession in 2008. Revenue from Wall Street transactions, as well as the wealth generated by those who work there, is a major component for the state’s financial picture and budget each year.

The report found pre-tax profits for the broker/dealer operations in the stock exchange declined by $1.7 billion to $14.3 billion in 2015. The first half of the year was largely a strong one for Wall Street, but the financial industry reported a $177 million in the fourth quarter, the first time it has done so since 2011.

Despite a decrease in profits, employment on Wall Street actually increased by 2.7 percent last year, averaging 172,400 jobs. The industry added 4,500 jobs all together, compared to 2,400 jobs added in 2014. It’s the first time Wall Street has added jobs two years in a row since the financial crisis it its peak.

The average salary in the securities industry has also increased by 14 percent in 2014 to $404,800 — nearly six times higher than pay in the rest of the city’s private sector. Data for 2015 is not yet available.

NYC Security Avg Bns by Nick Reisman

DiNapoli: NYC Economy Strong, But Risks A Slowdown

New York City’s economy, a driver for the state and the nation as a whole, has seen robust economic growth in recent years, but has a growing risk of a slowdown, Comptroller Tom DiNapoli found in a report on Monday.

“Strong job growth, combined with record numbers of tourists and a robust real estate market, has pushed tax collections to record levels and beyond the city’s expectations,” DiNapoli said. “Still, there are reasons to be concerned about the economy given current developments. To their credit, Mayor de Blasio and the City Council have prudently increased the city’s reserves in recent years.”

The city’s proposed 2017-18 budget includes a $2.3 billion surplus for the current fiscal year, which is being used to balance the proposed spending plan.

The extra cash largely has come from unexpected growth in tax revenue, lower debt-related costs and agency savings, along with a drawing down in reserves.

The city is anticipating budget deficits of more than $2 billion between the next fiscal year and 2020, but those are relatively small as a share of city reserves.

When it came to job growth, the city added a record 120,000 jobs in 2014, with an addtional 100,000 in 2015.

But the city’s budget is estimating a slower growth this year with 61,000 jobs as the economy is expected to cool — a decline that includes a stumbling stock market that will likely impact tax collections.

The will result in no growth in the personal income tax collections for the 2016-17 fiscal year.

rpt10-2016 by Nick Reisman

DiNapoli: 18 Villages In Fiscal Stress

There are 18 villages around the state that are in some degree of fiscal stress, Comptroller Tom DiNapoli found in a report released on Thursday.

In 2015, three of those villages had financial pictures that showed “significant” fiscal stress, DiNapoli said.

“The good news is that the number of villages in fiscal stress has decreased and remains low across much of the state,” said DiNapoli. “Local officials, however, must remain vigilant when it comes to both short- and long-term budgeting. By putting together sensible multi-year financial plans, the vast majority of our villages can remain financially stable and others can start to improve their fiscal health.”

DiNapoli has used the fiscal monitoring system for the last several years to assess the financial conditions of local governments and school districts around the state.

The villages deemed to be under significant stress were Potsdam, Pomona and Tannersville. Meanwhile, four villages had moderate fiscal stress: Cherry Creek, Gowanda and Fayetteville.

The monitoring system uses a range of factors to assess financial stress, including fund balance, out-year budget gaps and recurring expenses.

Munis Stressed2015 by Nick Reisman

DiNapoli: Cuomo Budget Increases Debt

Comptroller Tom DiNapoli released his analysis of the proposed 2016-17 state budget on Tuesday, finding it increases the state’s debt load and has a $1.8 billion deficit in the general fund.

At the same time, DiNapoli said the budget proposal from Gov. Andrew Cuomo continues to rely heavily and expand on lump sum appropriations for projects that are yet to be determined, a move that is at odds with the Budget Reform Act of 2007, which was designed to increase transparency in the process.

Still, DiNapoli found the state’s fiscal picture is in increasingly improved shape given strong tax revenue and money from legal settlements.

“The state’s fiscal position is much improved because of actions by the Governor and the Legislature, legal settlements and robust tax revenues this year,” DiNapoli said. “Yet structural budget challenges remain, and we cannot count on extraordinary one-time windfalls to pay our bills down the road. The Executive Budget reflects better times and proposes new investments in key areas such as infrastructure, but greater clarity is needed on how the state will pay for it all.”

The deficit itself is being closed through changes in the mid-year financial plan as well as proposed new actions, with Cuomo’s spending plan estimating a final surplus of $1.3 billion.

The state has benefited from more than $8 billion in windfall settlements with major financial institutions in the last two years, with the resources being spent either in the current enacted budget or in the proposed spending plan.

The budget does continue to hold spending to a 2 percent increase, the report found. But that is achieved in part through “the timing of payments and the manipulation of the movement of dollars throughout the State’s governmental funds structure” and doesn’t necessarily address structural imbalances in future budget years.

The Division of Budget estimates future surplus to range from $533 million in the next fiscal year, then declined to $114 million and finally increasing to $949 million in the 2019-20 fiscal year.

Cuomo’s spending proposal relies heavily on state-backed debt, which will increase by nearly $10 billion, or 19.6 percent. Over the next five years, it’s due to rise to $60.8 billion.

“Other borrowing that is not considered state-supported debt would add further to the overall debt burden,” the report found. “State-funded debt outstanding is expected to reach $70.8 billion by the end of SFY 2020-21, an increase of 13.2 percent over the same period.”

The remaining capacity under the state’s statutory debt limit is due to drop to $189 million by March 31, 2020.

DiNapoli’s report raises a number of transparency concerns with the budget proposal, which includes several measures that would bypass existing provisions intended to ensure integrity in the state’s procurement process. In some instances, the report found, the comptroller’s contract review authority, competitive bidding processes and notice provisions are proposed to be eliminated.

Then there are budget sweeps, which Cuomo’s spending plan proposes moving $750 million in unspecified transfers from dedicated funds to the general fund.

The $154.6 billion budget plan is due to pass before April 1, the start of the state’s fiscal year.

Review of Executive Budget 2016 by Nick Reisman

DiNapoli: Audit Finds Lax Collection Of Nursing Home Penalties

Nursing homes across the state are repeatedly hit for health and safety violations, but the state Department of Health has been slow to collect the fines levied by inspectors. An audit from state Comptroller Tom DiNapoli found that could hurt residents of senior facilities.

“These problems have resulted in significant delays,” DiNapoli said at a news conference on Monday. “In some cases, up to six years, when a violation is cited and then when the fine is actually issued.”

The money from fines charged to nursing homes for violations has gone toward improving the quality of care. But increasingly, the state has been slow to collect the money — a reflection that the current system in place needs to be changed.

“The agency needs to develop a single, more comprehensive system to track all enforcement actions as well as consider assessing fines for lower level infractions,” DiNapoli said.

But DiNapoli also says the DOH needs to add more employees who oversee fine collection for nursing homes.

“You really have a staffing issue,” he said. “I think that’s really the clear part of it where they just have one person part time doing this work.”

The Department of Health in a statement said a new enforcement process was put in place in April 2015 and it was working to ensure fines are assessed in a timely matter.

“Let’s be crystal clear: The Comptroller’s audit found DOH to be in compliance with federal regulations governing the inspection of nursing homes, and that the agency acts quickly on serious complaints,” said DOH spokesman Jim Plastiras. “DOH is committed to protecting the health and safety of New York’s nursing home residents.”

Fines for nursing homes range from $2,000 to $10,000 for repeat offesnes. Some advocates for the elderly say the state should consider increasing those penalties.

“It’s time, long overdue, that the state of New York become a little more structured, more oversight, to improve the quality of care,” said Jack Kupferman of the Gray Panthers NYC Network. “If that means increasing the dollar value of the fines so there’s a real bite, then let’s do it.”

The current fines by law are due to be reduced to $2,000 in April 2017. DiNapoli says the state Legislature should act to at the very least keep the penalties at their current levels.

DiNapoli: Pension Fund Recovers In Q3

The state pension fund in the third quarter posted a 2.88 percent rate of return and has an estimated value of $178.3 billion, Comptroller Tom DiNapoli’s office announced on Friday.

The growth represents a recovery of stores for the fund, which has struggled in the current fiscal year given the roller coaster that has been the stock market in recent months.

“The Fund experienced some recovery in the third quarter as markets continued to challenge investors across asset classes,” DiNapoli said. “As a long term investor, however, the Fund measures its success in years and decades, not months. We’re focused on prudent management of investments that weather volatility and provide sustainable returns and retirement security for generations to come.”

DiNapoli announced earlier this month at the annual winter meeting of the New York Conference of Mayors the fund was unlikely to hit the targeted growth rate of 7 percent this year.

DiNapoli last year announced the state would once again able to decrease contribution rates for local municipalities and taxing districts 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.

At the time, DiNapoli has revised the fund’s expected rate of return from 7.5 percent to 7 percent.

Contribution rates for local governments remain a key factor in local government budgeting, which is being squeezed this year with a tax cap that limits levy growth to less than a 1 percent increase.