Oct 18th - 4:09 pm
After Comptroller Tom DiNapoli this morning in a radio interview blasted a report from the Department of Financial Services critical of his handling of the state’s common retirement fund, the agency’s top official is hitting back.
In a statement from DFS Superintendent Mario Vullo, DiNapolis taken to task for his office not providing answers to specific questions raised by regulators at the agency on Sept. 9.
“None of the information provided to DFS in response to the September letter validates the claims being made now,” she said in the statement released Tuesday afternoon. “And putting aside all of the bluster, the Comptroller has not contested, because he cannot contest, the fact that he took 8 years to address these significant issues while pension fund managers nationwide have significantly cut or entirely eliminated their hedge fund investments.”
Meanwhile, Vullo insisted she reached out to DiNapoli before the report was released. DiNapoli’s office claims they were given a five-minute heads up on the report’s release.
“Prior to the release of our report, I personally called the Comptroller but he has yet to return my call,” she said. “DFS stands by its report and will continue to exercise its oversight of the pension systems and maintain its obligation to the public to report on these important issues.”
DiNapoli in an interview on Talk-1300 this morning called the report “inflammatory” and lacked professionalism for the charges made that his management is leading to excessive fees from hedge funds.
The report came after weeks in which DiNapoli was critical of Gov. Andrew Cuomo’s economic development efforts and called for enhanced procurement oversight after nine people were arrested in an alleged bid rigging scheme.
Oct 14th - 1:49 pm
The alleged bid-rigging of lucrative economic development contracts in major economic development programs showed there is a “systemic” and “structural” problem with oversight, Comptroller Tom DiNapoli said in a Friday radio interview.
Speaking to WCNY’s The Capitol Pressroom, DiNapoli said one area that should be under consideration for reform is shining more sunlight on the non-profit entities that have been used for vehicles of economic development projects.
“Maybe we should look at the question of non-profits,” DiNapoli said. “It all should be on the books.”
The renewed oversight push comes in the wake of the arrests of nine people — including a former top aide to Gov. Andrew Cuomo, Joe Percoco, and ex-SUNY Polytechnic President Alain Kaloyeros — in an alleged effort to secure contracts for favored developers.
DiNapoli said he would favor oversight for pass-through entities such as the Fort Schuyler Corp. that would require them to adhere to similar oversight methods that state agencies must abide by.
And DiNapoli wants the power of his office restored to have auditors review contracts worth more than $250,000.
“I think the lesson here is you can’t just trust all of this is going to be handled in the right way,” he said. “I do think you need independent oversight and that’s what our office is set up to do.”
The Cuomo administration has signaled it is open to reviewing procurement procedures in both the executive and legislative branches after a string of scandals have rocked state government in recent years.
And DiNapoli acknowledged what state lawmakers have said in recent days: A package of potential reforms is being discussed by both chambers of the Legislature.
The comptroller — whose relationship with Cuomo has been frosty at best in recent months — added it wasn’t “productive” to blame Cuomo for the overarching problems at SUNY and economic development.
“I think we will certainly be vigilant and working with the Legislature and hopefully with the governor to change the law,” he said.
Sep 27th - 1:27 pm
Comptroller Tom DiNapoli’s office on Tuesday announced 40 municipal governments are facing financial strains and persistent budgetary woes.
The breakdown includes 10 counties, 10 cities and 20 towns who are determined to be under some form of fiscal stress, based on a formula followed by the comptroller’s office that assesses a range of budget concerns include fund balance, budget gaps and other fiscal measurements.
“The challenges facing local governments across the state are real,” said DiNapoli. “Our monitoring system has shown that for those localities experiencing financial hardship, it can be difficult to overcome challenges that have been years in the making. Local officials should be carefully examining their scores and using this system to determine how they can budget prudently and develop realistic long-term financial plans.”
Of the 40 communities under fiscal duress, eight local governments are under “significant” stress including Monroe, Franklin Broome and Rockland counties. The cities of Albany, Port Jervis and the towns of Tuxedo and Parish are also on that list.
The designation is based on local governments’ 2015 financial statements.
Local governments have generally faced an array of financial and budgetary challenges in recent years, including high pension costs, shrinking tax bases and, most recently, a cap on property tax increases that constrains their ability to raise new revenue.
Sep 12th - 12:29 pm
Revenue growth from state and local sources will be limited for school districts in 2017 as the cap on property taxes and tax collections overall will take their toll, Comptroller Tom DiNapoli warned in an interview published Monday.
DiNapoli, speaking to the New York State School Boards Association, warned budget gaps over the next several years are possible, which he attributed to an increase in spending and declining tax revenue.
“We may have to be perhaps a little more conservative in our assumptions as we move forward,” DiNapoli told Kremer. “State budget gaps could be as high as $5 billion per year over three years due to increased state spending, decreased tax collections, and depletion of reserve funds.”
School districts have over the last several years seen increases in education aid from the state, and lawmakers and Gov. Andrew Cuomo this year agreed to end the Gap Elimination Adjustment for school districts.
But school officials continue to chafe under the state’s cap on property tax increases, which they have so far unsuccessfully lobbied to make less restrictive.
The cap is expected to allow for growth of less than 1 percent in 2017.
“Unless there’s a dramatic change in the economic trends, I don’t see that happening,” DiNapoli said.
Sep 1st - 11:56 am
The contribution rates paid by local governments for the state retirement system will remain largely flat in the 2017-18 fiscal year, Comptroller Tom DiNapoli on Thursday announced.
The average contribution rate for the retirement system will decreased slightly, from 15.5 percent to 15.3 percent of payroll. For the police and fire system, the contribution rate will shift from 24.4 percent to 24.3 percent.
The largely flat rates come after DiNapoli enacted three years reductions — providing local governments with some relief for one of the more costly line items in their budgets.
“After three years of rate reductions, pension contribution rates will remain stable for our participating employers in the near-term,” DiNapoli said. “While the financial markets have been volatile, our pension fund remains one of the strongest and best funded in the country, allowing New York’s public workforce to retire with the knowledge that their pensions are secure.”
The announcement is not wholly surprising. DiNapoli in an interview in August indicated he would keep the contribution rates the same for local governments, which have struggled in recent years to raise revenue amid a cap on property taxes, the flat growth of aid to municipalities and mandated state spending requirements.
Aug 31st - 11:59 am
Comptroller Tom DiNapoli touted on Wednesday the agreements with companies New York’s pension fund has invested in that have agreed to find ways of reducing their greenhouse gas emissions.
“Climate risk is one of the greatest threats to our investments across the board,” DiNapoli said. “We’ll continue to use our strength as a major investor and call on our publicly held companies to plan ahead and address climate change now. The companies that have agreed to take steps to lower their emissions are to be commended. Their actions will benefit their long-term profitability.”
DiNapoli’s office announced agreements with Allete and Northwestern, two major energy providers, that will have the firms finding ways to deploy low-carbon electricity generation resources.
The pension fund had originally filed shareholder proposals with both companies and has withdrawn them following the agreement.
It’s the latest development in the ongoing effort by DiNapoli’s office to take an activist approach for the pension fund’s investment portfolio.
At the same time, DiNapoli filed a similar shareholder proposals with five additional energy companies.
General Dynamics, meanwhile, has agreed to set goals for lowering its greenhouse emissions based on the UN’s intergovernmental panel on climate change. The pension fund has invested $124.4 million shares of General Dynamics.
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.”