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

DiNapoli: Wall Street Profits Reach $12.3B In First Six Months

The financial industry’s profits in the first six months of 2017 hit $12.3 billion, a third higher than the $9.3 billion earned over the same period in 2016, Comptroller Tom DiNapoli’s office announced Monday in a report.

The findings mean Wall Street is likely on pace for a second straight year of increased profits, DiNapoli said.

“After a very successful first six months, Wall Street profits are on track to exceed last year’s level, barring a major fourth quarter setback,” DiNapoli said. “When Wall St. does well, state and city tax collections benefit. Nevertheless, attempts to boost profits by rolling back financial regulations and consumer protections could promote excessive risk-taking and volatility and put everyday Americans and the broader economy in harm’s way.”

The health of the financial and securities sector in New York is key for the overall health of the economy and the state budget picture, providing a bellwether of sorts for how the next year in state budgeting will be conducted.

Profits increased in 2016 by 21 percent to $17.3 billion, the first increase after three years of declining profits. The improved margins were driven in large part by lower settlement costs and efforts to reduce costs in the sector.

More than 11,000 jobs in the industry have been added in New York City during the last three years, increasing employment to 177,000 people in 2016, the highest level since the financial crisis in 2008.

Advocates Fret Workers Comp Changes

Advocates from the health and safety professions this week are pushing back against proposed changes to the state’s workers’ compensation regulations over concerns the reforms will tip too far out of balance for those injured on the job.

State lawmakers and Gov. Andrew Cuomo agreed to the first workers compensation law changes in more than a decade earlier this year.

But advocates, some labor officials and Democratic lawmakers in the state Senate have become increasingly uneasy with the changes as their regulations are being considered.

Groups on Wednesday delivered post cards to workers compensation offices across the state to register concern.

“We’re delivering these petition cards to call on the New York State Workers’ Compensation Board to protect New York’s injured workers,” said Charlene Obernauer, the executive director of New York Committee for Occupational Safety and Health. “It’s that simple. These proposed guidelines have no basis in medical science and need to be unilaterally rejected. We’re sick of the attack on injured workers, and we’re here to say that injured New Yorkers deserve better than to have their benefits taken away.”

DiNapoli: Local Governments Losing Out On Water Revenue

Local governments in New York are losing out on revenue from water bills due to incorrect billing or inaccurate meters, an audit by Comptroller Tom DiNapoli released on Thursday found.

The lost revenue was in part blamed also on broken or out of date underground pipes.

But in some instances, local governments have also dealt with inaccurate meters or improper billing. Taking corrective measures could boost revenues for some local governments by more than $400,000, auditors found.

“Water leaks, broken pipes and aging infrastructure are costing local governments millions of dollars annually,” said DiNapoli. “Across New York, my audits have revealed infrastructure problems, poor budget practices and a lack of long-term planning are straining municipal finances and increasing costs for taxpayers. If these problems aren’t addressed, the issues plaguing water systems will only get worse.”

The report reviewed audits of 161 local governments DiNapoli’s office had conducted and seven public water authority systems over the last 5-1/2 years.

DiNapoli: Schools Not Enforcing Anti-Bullying Law

New York schools have not implement key elements of an anti-bullying law, an audit released Friday by Comptroller Tom DiNapoli found.

“The Dignity for All Students Act was created to protect students but four years later, many schools remain unsure of what to do and make serious errors in reporting incidents of harassment and bullying,” DiNapoli said.

“All students deserve schools that support them and are safe and free from harassment and bullying. School districts must protect students’ rights and ensure thorough training for school staff. We appreciate that the State Education Department agrees with our recommendations and is taking steps to help school officials improve their ability to safeguard students.”

The requirements fall under Dignity For All Students Act, which was part of an effort to crack down on bullying with requirements for schools that include sharing contact information and making efforts toward training.

Many schools, however, are failing to do the necessary training and making errors when it comes to reporting.

The audit of a sample of 20 schools outside of New York City found some schools under reported or failed to report incidents, including cyberbullying, even though law enforcement had become involved.

In another case, a school failed to report bullying that had persisted before the victim’s attendance at a different school.

And 17 of the schools reported they had trouble interpreting or implementing aspects of the Dignity for All Students Act.

“No matter who you are, what you look like or where you come from, we all deserve full equality and the chance to succeed, especially within our public education system,” said Assemblyman Harry Bronson.

“We must do our best to teach students the importance of dignity and respect and to protect them from harassment and discrimination. I look forward to working with Comptroller DiNapoli and the State Education Department to help our schools meet DASA guidelines and reporting requirements.”

DiNapoli Says Con Con Could Cost $50M

Comptroller Tom DiNapoli estimated on Thursday a constitutional convention could cost the state at least $50 million — a figure he said was a “conservative” estimate.

Speaking with reporters at a news conference in his office, DiNapoli said the convention would have to spend money on pay for delegates and staff and their pension credits.

DiNapoli is opposed to holding one.

“Our conservative estimate based on ’67 number is $50 million,” he said, referencing the 1967 convention, the last time one was held to consider revising the state constitution. “I think it could be a lot higher than that. I’d rather see that money put to other issues. I’d rather see our attention focused on other issues.”

Voters next month will consider a constitutional convention referendum, placed on the ballot every 20 years. The referendum has been opposed by labor unions, environmental groups and other organizations who fear it could lead a stripping of key rights in the existing document.

It’s an argument DiNapoli said he’s sympathetic too.

“Normally I’m an optimist as you all know. But on this one I’m a pessimist,” he said. “I think it’s a very risky proposition to hold a constitutional convention.”

At the same time, he noted there are better means of revising the existing document now. He backs amendments also on the ballot next month that would create a land bank for development in the Adirondacks and an amendment that would strip the pensions of officials convicted of a felony/

“There’s a long list of things that are good in the constitution,” he said. “Could it be made better? Absolutely. But we should follow the current process.”

Report: $27B Needed In Repairs For Bridges

Locally maintained bridges needed more than $27 billion in repairs, a report released Tuesday by Comptroller Tom DiNapoli’s office found.

The report focuses on bridges that are owned and operated by local governments, which account for 8,834 of the 17,462 bridges in the state. Most are owned by county governments.

The report raises questions over how local governments could afford to pay for the repairs, with many deemed to be structurally deficient.

“Local communities are facing a big price tag for maintaining and repairing bridges,” DiNapoli said.

“These structures are aging and the cost for repairs will likely only increase over time. Many local governments understand the importance of long-term planning for their infrastructure needs but they will need help. While the state has taken steps to make funds for repairs available, the assistance of the federal government has also been critical. Difficult decisions lie ahead, but these infrastructure needs must be addressed.”

Still, the overall percentage of structurally deficient local bridges has actually declined from 16.7 percent to 12.8 percent between 2002 and 2016. The percentage of state-operated bridges has been flat at around 9 percent, the report found.

New York City contains the highest proportion of functionally obsolete bridges, at nearly 76 percent.

The total cost of needed repairs to all highway bridges is estimated at $75.4 billion.

Local Bridges by the Numbers by Nick Reisman on Scribd