May 13th - 11:00 am
The state pension fund has hit $160.4 billion at the end of the 2012-13 fiscal year, earning a 10.38 percent rate of return for investments, Comptroller Tom DiNapoli’s office announced this morning.
The nation’s third-largest pension fund continues to recover the shock of the 2009 financial crisis when it lost billions of dollars in value.
But the 10.38 percent rate of return is nearly double the rate of the prior fiscal year, when DiNapoli reported a 5.96 percent rate of return. The fund had an even larger rebound in 2010-11, when it reported a 14.6 percent rate of return.
Domestic stocks, which account for 36 percent of the pension fund’s total value, recorded a 14.48 percent rate of rate.
Fixed income, which accounts for nearly a third of all investments, returned 4.87 percent, according to DiNapoli’s office.
Private equity holdings meanwhile returned 11.75 percent, and real-estate investments saw a 11.08 percent rate of return.
“The New York State Common Retirement Fund has reached a milestone,” DiNapoli said in a statement. “The Fund ended the fiscal year at an estimated $160.4 billion, an all-time high, and it remains well-positioned for growth as the financial markets continue to gain strength. Fiscal year 2014-2015 will be the final year that employer contribution rates will reflect the market loss of 2008-2009.”
Apr 30th - 1:37 pm
New York’s largest public employees union, CSEA, seized on state Comptroller Tom DiNapoli’s report earlier today that overtime continues to increase at the state agencies as an opportunity to slam Gov. Andrew Cuomo for failing to keep staffing at adequate levels.
“The Cuomo administration continues to purposely understaff state agencies and mandate overtime to a perverse degree,” said CSEA President Danny Donohue.
“They tell the public they’re cutting the public work force and improving operations when they are really eroding decent middle-class jobs, leaving people at risk and still costing the public plenty.”
The union noted that overtime in many agencies – especially those that deal with vulnerable populations, like the offices of People with Developmental Disabilities and Mental Health – is mandated, and union contracts don’t entitle state workers to overtime pay.
CSEA has long insisted that mandated overtime, which is allocated at the discretion of managers who prefer it to hiring additional staffers that require health care and pension benefits, can be counterproductive by contributing to fatigue, burnout and the likelihood of both occupational injuries and on-the job mistakes – all of which costs taxpayers in the long run.
DiNapoli’s report, which found overtime pay for employees at state agencies grew by almost 11 percent last year to $529 million, also gave CSEA a chance to criticize Cuomo’s “misplaced priorities,” noting the administration petitioned the union to create 120 exempt class positions for the governor’s Empire Fellows program and retained an outside consultant to provide advice on recruiting to bolster the aging state workforce.
“The people of New York would be better served if Governor Cuomo showed more concern about managing his existing work force – providing them with the help, resources and respect that they need – rather than bringing in outside consultants and a new layer of political patronage,” Donohue said.
Cuomo has had a tense relationship with the state worker unions since his days as a candidate when he ran on a platform that called for wage freezes. His first contract negotiations with PEF (which endorsed Cuomo in 2010, but was later sorry about it) and CSEA (which did not) were rocky, and the unions weren’t thrilled (to say the least ) with the creation of a sixth pension tier, either.
It will be interesting to see how these two unions – and the rest of the labor community – react to candidate Cuomo when he’s running for re-election next year. New PEF President Susan Kent told me during a recent CapTon interview that her members aren’t prepared to re-endorse the governor at this moment, and if he wants their support, he’s going to have to work for it.
UPDATE: State Budget Division spokesman Morris Peters sent the follwing comment in response to CSEA’s claims:
“Since the Governor took office, agency budgets were cut by 10 percent in the first year and spending has remained flat ever since. Each agency is managing their workforce to stay within their budget. As a result, overall payroll spending is down.”
Apr 29th - 4:46 pm
New York’s finances are in a better position compared to previous fiscal years as the state ends the 2012-13 fiscal year in the black, Comptroller Tom DiNapoli said in a report released this afternoon.
“New York State endured significant challenges last year, including the second most expensive storm in American history, but was able to close the books with a slightly higher balance than expected in the latest projections,” DiNapoli said in a statement. “The spending restraint shown in recent budgets has helped to keep the state in the black. Nevertheless, tax revenue has fallen short of initial projections for six years in a row. While we have benefitted in the short run from a number of non-recurring revenues, relying on such resources does not bode well for the long-run.”
Despite the costs from Hurricane Sandy and an economy that has struggled to come back to pre-recession levels, DiNapoli said tax revenue ended the year $378.2 million higher than February projections, but $70 million below initially estimated.
Meanwhile, the state’s general fund ended the fiscal year with $1.6 billion, nearly $177 million less than the 2011-12 fiscal year balance and $136 million more than estimated in the last financial update.
The full report:
Apr 12th - 3:23 pm
Comptroller Tom DiNapoli today released a preliminary report on the state’s 2013-14 budget that expressed concerns over one-shot revenue sources, transparency and growing public authority debt.
“The Governor and the Legislature deserve credit for once again adopting budget bills ahead of the April 1st deadline,” DiNapoli said in a statement. “Nevertheless, New York continues to struggle to meet serious fiscal challenges. The recently passed state budget restrains spending growth, but it also contains temporary resources and revenue assumptions that may fall short. Instead of reining in the state’s reliance on backdoor borrowing, it expanded the use of public authority debt.”
The approved $143 billion spending plan was one of the earliest budgets to pass the Legislature in modern times. It is also the third on time budget in as many years.
DiNapoli’s office found cited the start of a new debt structure propped up by the state’s sales tax revenue that would allow for new borrowing methods by public authorities that are done so without voter approval.
At the same time, a new debt structure for for SUNY dormitories transfers debt servcice off budget, which DiNapoli’s report says reduces transparency.
The report points to $385 million in new public authority debt for state and local facilities, as well as $750 million in public authority debt for unspecified transporation projects.
DiNapoli cited cocners the budget doesn’t make any provisions to dela with the impact of the forced federal budget cuts under sequestration.
DiNapoli’s office promised a fuller review of the budget picture once the state Division of Budget releases an updated fiscal plan in the coming weeks.
Mar 29th - 11:55 am
Comptroller Tom DiNapoli weighed in on the passage of the 2013-14 state budget this morning, saying in a statement the on-time budget three years in a row was no small feat and the reflection of an “efficient process.”
But the comptroller said he remains concerned with the growing public authority debt and a reliance on “significant non-recurring actions.”
“It also includes several new provisions that extend the state’s reliance on public authority debt to meet the state’s spending needs. New York’s debt burden is among the highest in the nation, making the goals of meeting critical infrastructure needs while remaining within the state’s debt caps more difficult,” DiNapoli said.
DiNapoli said “necessary steps” were taken to address issues with the STAR rebate program, but not enough was done to increase oversight of the $2 billion special education program.
The comptroller’s office negotiated significant changes to Gov. Andrew Cuomo’s plan to allow local governments to smooth out pension costs against future savings, a controversial proposal that was opposed by the governor’s own state Democratic Party co-chairwoman, Syracuse Mayor Stephanie Miner.
DiNapoli said his office is now conducting a detailed analysis of the 2013-14 state budget and plans to release a report soon.
Mar 22nd - 9:21 am
The second item that appeared in today’s morning memo:
Comptroller Tom DiNapoli has won a broad overhaul of Gov. Andrew Cuomo’s initial push to smooth out pension costs for localities.
The budget agreement appears to have adopted a new model based on the current amoritzation plan that’s been in place with the comptroller’s office since 2010. DiNapoli’s office says the new plan minimizes risk while allowing local governments to have the option of calibrating on an annual basis how much of their pension costs they would like to smooth.
The original proposal envisioned a 25-year amortization, while the agreement in the budget has a 12-year payback.
The 137 entities with public employees that have already entered the program can choose to enter the new amortization plan or stay in the current one.
“Local governments must fully weigh the long-term consequences of this new program before electing to participate,” DiNapoli said in a statement. “While this program provides more upfront cash savings than the existing program, the savings come with a cost. As employer contribution rates drop, more of the cost savings from the drop in rates will be used to pay off the earlier deferrals. It is always best when local governments pay their operating costs in full and budget for today’s expenses.”
Cuomo’s initial proposal had come under criticism from his own Democratic Party co-chairwoman Stephanie Miner, the Syracuse mayor. Miner had called on the Legislature and DiNapoli to reject the proposal and find broader relief for struggling local governments.
Cuomo had insisted throughout the process that local governments merely had the option to enter the stable rate plan, which would essential tap into pension savings now at the expense of future savings down the road.
Despite the criticism, Cuomo doubled-down on the proposal in his 30-day budget amendments and added more entities to the list that would qualify under the plan: four public hospitals and the BOCES program. Those amendments stay in the original plan.
Mar 15th - 1:37 pm
Westchester County-based PepsiCo will dislcose its lobbying ties and contributions under an agreement announced today by Comptroller Tom DiNapoli’s office.
The news comes after DiNapoli issued a shareholder resolution calling for the disclosure of shareholder money spent on lobbying and other political activities.
The compnay will dislcose its direct lobbying and contributions made to trade associations, as well as funds paid to grassroots lobbying and tax-exempt organizations.
“PepsiCo has taken an important step in giving shareholders a clear view of the way it uses corporate dollars in the political arena,” DiNapoli said in a statement. “Shareholder value is enhanced and reputational risks are reduced when companies disclose how corporate money is being spent in politics. Companies should follow PepsiCo’s lead by embracing transparency.”
This is the latest in DiNapoli’s officers to use the state’s pension fund in order to leverage greater transparency from companies the fund is invested in. DiNapoli’s efforts so far have led bank KeyCorp and telecommunications giant Qualcomm to disclose political spending with direct company funds.
DiNapoli’s office says it has filed 27 shareholder resolutions seeking corporate political transparency.
The news also comes as Gov. Andrew Cuomo is in the midst of a new push for campaign finance reform in New York. Cuomo backs a law that would require donations above $500 be dislcosed within 48 hours.
Mar 8th - 5:24 pm
Comptroller Tom DiNapoli warned New York could start to feel the pinch from the forced budget cuts in Washington in a reported released this afternoon.
“Uncertainty in the economy and the effects of federal sequestration cuts to the state budget pose risks that we need to recognize appropriately.” DiNapoli said. “Discussions with the federal government over Medicaid reimbursement add to the uncertainty.”
Gov. Andrew Cuomo’s 30-day amendments did not include any revisions to his $142.6 billion budget proposal to reflect the sequestration, which took effect just before the changes to the budget plan were made.
Cuomo has said that local communities could be feeling the impact of the sequester, but New York’s budgetary framework will be largely unaffected.
Lawmakers expect to pass a spending well in advance of the April 1 deadline.
No word in DiNapoli’s report on whether he believes Cuomo’s pension smoothing proposal for local governments is a good idea. DiNapoli has said he is concerned with the proposal and Syracuse Mayor Stephanie Miner — Cuomo’s Democratic party co-chair — has called on him to reject it.
Mar 8th - 12:29 pm
The deputy comptroller who oversees local government and school accountability is stepping down, he announced in an email obtained by Capital Tonight.
Deputy Comptroller Steve Hancox’s departure comes as municipal and school district budgets are under severe fiscal strain.
While the comptroller’s office is the custodian of the state’s pension fund, the office is also charged with oversight of the state’s local government budgets, as well as school districti spending, producing hundreds if not thousands of audits and reports each year.
The work has become all the more important as local school districts and governments face cash crunches from the aftershocks of the economic recession, a shrinking tax base and growing pension costs.
At the same time, a cap on property taxes has been imposed, with nearly all districts and local governments living within the roughly 2 percent limit.
It was Hancox who responded to Assemblywoman Donna Lupardo’s letter on Southern Tier schools facing insolvency (the news Hancox relayed was not encouraging — namely that their options were either emergency state aid or a control board from the state).
In an email to staff sent this morning, Hancox says it’s time to move on and that it’s time for someone with a “new perspective” to fill the post. He does not give a specific reason for leaving or indicate what his future plans are.
After nearly 34 years of service in the Comptroller’s Office, I think it is time for me to go do something else. I have enjoyed all 34 of my years here and have really loved the last 13 years working in Local Government. As you may imagine, I have made this decision with some mixed emotions. But as you have heard me say repeatedly, we need to embrace change, and I think it is a good time for the Division to have someone with a new perspective sit in this chair, and it will be good for me to go do something completely different than what I do now.
I hope to get the chance to personally say good-by to many of you in the next month or two before I go. But if I don’t, I want to thank all of you for the extraordinary work that you do each and every day, and for making my job so easy for so many years.
Mar 5th - 11:42 am
New York’s public authority debt load has grown to a quarter of a trillion dollars, according to a report released today by Comptroller Tom DiNapoli’s office.
“Public authorities are an increasingly influential sphere of government, but they still operate in the shadows with too little accountability to the public,” DiNapoli said in a statement. “The Public Authorities Reform Act of 2009 made some progress in improving oversight but more needs to be done to curb the state’s overreliance on public authorities issuing debt without voter approval.”
Despite several years of calling for paring down public authorities and shuttering ones that no longer serve a useful, oeprating function, the state still has 1,169 authorities, including 324 state authorities and 837 local authorities.
The public authorities emply more than 150,000 and pay out nearly $10 billion in salary and compensation. Of those workers, 11.6 percent are paid six figures.
The system of public authorities was championed most prominently and famously by builder Robert Moses as a way to circumvent voter approval for borrowing.
DiNapoli earlier this year released an analysis of Gov. Andrew Cuomo’s budget proposal that found it would expand the issuance of debt through public authorities through a new bond financing program that’s supported by sales tax revenue.
Budget Director Bob Megna strongly pushed back on the comptroller’s report, insisting that the state uses the “pay-go” model for budgeting.