Tom DiNapoli

DiNapoli: No Special Needed If Congress Reverses Health Care Cuts

From the Morning Memo:

Gov. Andrew Cuomo this week raised the specter of a special session before the year ends to address the deficit caused by federal health care cuts – both already realized and potentially pending.

But state Comptroller Tom DiNapoli, New York’s chief bean counter, said during a CapTon interview last night that he doesn’t believe state lawmakers will be forced to return to the Capitol prior to the January start of the 2018 session if Congress reaches a deal in the coming weeks on averting reductions to the Disproportionate Share Hospital payments and Children’s Health Insurance Plan.

“The DSH cuts have been on the table for a long period of time, they keep getting pushed off though,” DiNapoli said. “We’ve heard from some of our Senate leaders, and (Senate Minority Leader Chuck Schumer) is cautiously optimistic, that Washington they will in fact come to some agreement, if not all, to put off some of these cuts again. So, I think part of what we need to do is to wait and see what gets sorted out in Washington.”

Cuomo has been sounding the alarm about the damage that will be done to New York’s bottom line – a loss of several billion dollars over the next several years alone – if Congress does not reverse funding cuts to safety net hospitals, which took effect Oct. 1. The SHP cuts have been scheduled for some time as part of the Affordable Care Act, but Congress has repeatedly pushed them back.

Congress also failed to reauthorize the program that provides coverage for some 330,000 low-income kids across the state who aren’t eligible for Medicaid. That program, known as CHIP, technically ran its course at the end of September as a result of federal inaction, and New York stands to lose $1.1 billion if it is not reauthorized, the governor said.

And the situation will be even worse, the governor has warned, if the tax reform plan currently under negotiation on Capitol Hill eradicates New Yorkers’ long-standing ability to deduct their state and local taxes, helping to take the sting out of the fact that they live in the state with the nation’s highest property tax burden. (Thanks to pushback on both sides of the aisle, it now appears Republicans are backing down from an outright repeal, though some changes are still under consideration).

What’s more, New York also stands to lose a big chunk of its federal Medicaid funding if Congress ever manages to get a deal on repeal and replacement of Obamacare, with the most recent proposal – Cassidy-Graham – calling for block granting those funds, in a move that would hurt New York more than any other state, Cuomo said.

DiNapoli declined to pick sides in the latest fight between Cuomo and NYC Mayor Bill de Blasio over funding for NYC Health + Hospitals, the nation’s largest municipal public hospital system and New York’s largest provider of safety-net care.

“No one has a crystal ball, but I think we’ll see some, my hope is, we’ll see some federal action on this sooner or later, so some of what’s being discussed is a dire consequence, having a special session, some of the things we’re talking about, probably, hopefully will not come to pass,” DiNapoli said when asked if the mayor should, as the governor maintains, pick up the tab for H+H funding, or, as the mayor insists, the state should pony up the $380 million it is currently withholding from the system.

The comptroller did say that he believes the Republican members of New York’s congressional delegation need to “step up to the plate and say to their leadership: this is really going to hurt us.”

“We already know there’s going to be many competitive House races in the state,” DiNapoli said. If anything like what’s being proposed goes through, I think people are going to be outraged – as well they should be.”

“…It’s very important that New York push back. What the governor is saying, what the mayor is saying, all of that is accurate, because if we don’t win some of these battles in Washington, then we’re going to be back home fighting each other over a diminished pot.”

“That’s going to be very hard for the Legislature at the state level to then have to figure out how we’re going to keep all these local governments from going over the edge in terms of providing services versus raising taxes to keep providing the services that New Yorkers expect.”

DiNapoli: Revenue Boosted By Business Tax Collections

Tax collections from businesses helped buoy the state’s overall tax collections last month, according to a report released Friday by Comptroller Tom DiNapoli’s office.

The August tax collections report found state revenue from taxes totaled $28.2 billion for the five months of the current fiscal year — $133 million higher than the updated projections.

This has come from a double digit increase in business tax collections.

“Business tax receipts have jumped and are up more than 30 percent from last year,” DiNapoli said. “However, that strong growth largely reflects increased collections from tax audits. Quarterly payments from both business and personal income taxes are due in September, which will provide a better indication of how current economic conditions are influencing tax collections this year.”

All-funds spending reached $62.4 billion through Aug. 31, or $4 billion higher than the same period last year.

DiNapoli Audit Details Niagara Falls Financial Woes

The Office of the State Comptroller projects the city of Niagara Falls will deplete its available fund balance by the end of this year and will face a $12 million budget gap in 2019. According to a recent audit, released Friday but forwarded to the press Tuesday, the city has been using its fund balance and revenue from the Seneca Niagara Casino to balance its finances.

The Seneca funding source has currently run dry, with the Nation disputing whether its still required to pay a portion of its slot revenues under a compact with the state. The review assumed no additional revenue would be received although the state has begun an arbitration process.

“In our prior audit, we recommended the Mayor and Council develop realistic budgets and adopt a multiyear financial plan. Our prior audit also discussed the use of casino revenue to balance the budget. However, the City did not maintain a multiyear financial plan and has continued to rely on unreliable revenues and one-time funding sources,” OSC wrote.

The city council is responsible for initiating a corrective action plan. The comptroller’s recommendations include adopting a realistic budget funded by recurring revenues, and rebuilding the fund balance.

Niagara Falls Mayor Paul Dyster, D, responded to the audit, saying he agreed that the city has room for improvement with regards to creation and implementation of its annual budget. He said the administration however, has already started reducing its reliance on casino revenue and does not anticipate any after 2023, the year the current compact between the Seneca Nation and the state concludes.

Dyster also expressed disappointment that a draft of the audit was “made public” prior to the official release Friday.

Niagara Falls Audit by Ryan Whalen on Scribd

DiNapoli: Travel Ban Hurts Economy

President Donald Trump’s ban on travel and refugees is hurting the state’s economy, Comptroller Tom DiNapoli said in a radio interview on Thursday, pointing to the broader impact the moratorium could place on tourism.

“You’ve already seen some of those numbers go down,” he said on WCNY’s The Capitol Pressroom. “People are getting concerned, if I go there, will I be able to come back? So, I think there are so many negative connotations about what the president is proposing.”

Trump announced this week he had signed a revised executive order blocking travel from six predominately Muslim countries, while also banning refugee travel. Upstate New York, in particular, has seen an influx of refugees over the last decade.

State lawmakers are pushing for the budget to include funding for refugee centers that could be lost once the refugee ban is in effect.

DiNapoli, in the interview, decried what he said was rhetoric that is disparaging of immigrants.

“So much of the hyped up rhetoric that we’re disparages immigrants, it’s not new, but it’s certainly at a hyped up level since the campaign,” he said. “In New York, where would be without our immigrant communities? It’s a strength. It’s an economic strength.”

DiNapoli Urged To Back Helicopter Purchase As Safety Is Questioned

The president of the union that represents members of the State Police on Monday urged Comptroller Tom DiNapoli in a letter to approve the purchase of a $12.5 million helicopter.

The purchase of the Sikorsky S76-D, which would be used for both the State Police and to transport Gov. Andrew Cuomo around the state, was rejected by DiNapoli’s office last month.

But in a letter from the Police Benevolent Association of the New York State Troopers, President Thomas Mungeer writes that the purchase of the helicopter would help the state aircraft fleet return to “full strength.”

“The last helicopter purchase was in 2002, making even the more recently acquired aircraft in the fleet almost 15 years old,” Mungeer wrote in the letter, which was obtained by Capital Tonight. “This situation puts the safety of our members at risk and is not acceptable.”

The Cuomo administration has insisted the purchase is still underway and is answering questions raised by DiNapoli’s office over the contract.

The issue surrounding the purchase as exacerbated an already contentious relationship between Cuomo and DiNapoli.

An administration official on Monday raised pointed safety concerns with the delay in the purchase, knocking both DiNapoli and his deputy, former Assemblyman Alexander “Pete” Grannis.

“Tom DiNapoli and Pete Grannis are still politicians at heart and the fact that they are so clearly playing politics with essential public safety equipment is reprehensible,” the source said. “They better pray there are no accidents.”

In a statement, DiNapoli spokeswoman Jennifer Freeman said it was necessary for their office to conduct the needed due diligence in evaluating the purchase.

“We are evaluating a multi-million dollar helicopter purchase with taxpayer money. Our job is to evaluate whether an entity has done its due diligence, which did not happen in this case,” Freeman said. “We appreciate getting feedback from the groups affected, such as the PBA. However, we have a number of remaining questions on this procurement and are still waiting to receive written documentation and information to address our concerns. We are an independent agency charged with protecting the taxpayers, and we don’t rubber stamp contracts.”

At the same time, Freeman took note of the timeline: No new helicopters have been purchase in 14 years, while one was lost in 2012. The budget appropriation for a new helicopter was approved in 2013. The comptroller’s office received the sole-source request for the helicopter on Sept. 30.

“If there are serious safety issues,” she said, “why did the state wait so long?”

TomLetterToDiNapoliDec12.2016 by Nick Reisman on Scribd

After Challenging Year, Pension Fund Posts Gain In Q1

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.”

Buffalo Billion Payments Are On Time This Month

It appears the state may have finally figured out the cash-flow issues that have plagued the Buffalo Billion RiverBend project. Lead contractor LPCiminelli said it received the latest round of payments, $31.5 million dollars for April’s invoice, late Monday.

Two weeks ago, the state comptroller’s office approved roughly $33 million of the lump sum $154 million requested by Empire State Development for the project. The comptroller wired the money to LPCiminelli, narrowly avoiding layoffs.

“We determined that this initial amount would hold vendors harmless, while we continued to seek information in support of the payment request,” OSC press secretary Kate Gurnett said.

The comptroller’s office said it was withholding the rest of the money because ESD had failed to provide all the necessary information mandated by the governor and the state legislature. Gurnett said OSC approved the remaining $121 million on June 17th after ESD “finally” answered the lingering questions.

The situation earlier this month was the second well-documented late payment by the state this year. In February, subcontractors temporarily laid off about 200 construction workers because they hadn’t been paid.

LPCiminelli said May’s invoice will be due around this time next month.

DiNapoli Criticizes Process That Led To Buffalo Billion Payment Delays

At the beginning of this month the New York State Comptroller’s Office approved the Dormitory Authority of the State of New York as the funding source for more than $82 million for late payments to contractors on the Buffalo Billion RiverBend project. The last second infusion of cash allowed about 140 construction workers who were temporarily laid off to return to the site.

“The money did get out the door and we certainly played our role to fulfill that. We know that economic development’s been a key priority here in Western New York both for the Governor and for the Regional Economic Development Council and for Empire State Development,” Comptroller Tom DiNapoli said during an interview in Buffalo, Friday.

But DiNapoli also said if his office had a more active oversight role in the state’s economic development programs, the delay may have been avoided in the first place. The comptroller said has office has been concerned that contracts handled through authorities and non-profits set up by the state are not getting enough direct review.

“We’d like to see more transparency and accountability so people know where the money’s coming from and where it’s going and that it gets there on time and I think that’s going to be an ongoing concern,” he said.

DiNapoli said more oversight for his office would actually make the process more efficient, not less. He said when payments are made through authorities like DASNY, they are in essence operating like shadow governments.

“The Dormitory Authority is a case of an authority that in many ways has gone way beyond its initial mission and so much of the borrowing that’s done for the state now is done through authorities, Dormitory Authority being one of them.”

State Launches $2 Billion Index for Low-Polluting Companies

dinapoli 1The state will invest $2 billion from the $184.5 billion pension fund into companies that produce low carbon emissions, Comptroller Tom DiNapoli announced today. The new investment will be weighted toward carbon-cutting businesses, and will reduce or exclude investments into high-carbon companies.

This comes on top of $1.5 billion that the state had already invested into sustainable strategies across the state.

The Comptroller initially announced the investment in Paris, where he’s participating in a panel at the United Nations’ Climate Change Conference this week.

“Low-carbon, sustainable investments are key to our future,” DiNapoli said in a statement. “Our pension fund has long-supported climate aware strategies, and this expansion of our commitment offers a sensible solution that will protect the Fund’s investments.”

The announcement does not mean that the state has completely divested from companies that produce high carbon emissions. There is a bill in the legislature that would require the state to divest from companies that produce fossil fuels, but it has not gained support among both majority conferences.

DiNapoli also announced an additional $1.5 billion toward the pension fund’s Sustainable Investment Program. That brings the Fund’s total investment in sustainable business to the $5 billion mark – an all-time high.

Pension Contribution Rates And Rate Of Return To Decrease

dinapoliThe employer contribution rates for the state pension fund in the coming 2016-17 fiscal year will once again decrease, but so will the assumed rate of return for the fund overall, Comptroller Tom DiNapoli on Friday announced.

The reduced contribution rate — good news for local governments that pay into the state pension system for their public employees — was long anticipated from DiNapoli.

The assumed reduction in the overall rate of return for the fund, which was valued at the close of the 2014-15 fiscal year on March 31 at $184.5 billion, comes after weeks of volatility in both foreign and domestic markets.

The overall employee contribution rate for the common retirement system will decrease from 18.2 percent of payroll to 15.5 percent — a roughly 15 percent decrease. The average contribution rate for the police and fire retirement system will decline by 2 percent — from 24.7 percent of payroll costs to 24.3 percent. More >