May 22nd - 1:26 pm
Add the City of Poughkeepsie to the list of New York municipalities teetering on the edge of fiscal disaster.
According to an audit released today by state Comptroller Tom DiNapoli’s office, “inaccurate budgeting” by the Hudson River city has left it with a $11 million general fund deficit and caused “severe” fiscal stress. Complicating matters is the fact that the city’s debt burden has increased 45 percent over the past five years.
“Communities across New York are dealing with increased fiscal stress and Poughkeepsie is no different,” DiNapoli said in a press release.
“But unrealistic budgeting has severely deteriorated Poughkeepsie’s financial condition. City officials have continued to overestimate revenue and under-budget for known expenditures. Ultimately, this may reduce the city’s ability to provide services to its residents and place a growing burden on property taxpayers. Officials must develop a long-term plan to get the city back on track.”
In 2010 and 2011, auditors found city officials over-estimated revenues by $3.2 million and under-budgeted appropriations by $4.7 million. This includes over-estimating payments in lieu of taxes ($381,000), rental payments ($305,000) and interest earnings ($426,000); as well as over-expending budget line items for health insurance ($944,000), accumulated sick pay and vacation pay ($750,000), and workers compensation ($415,000).
DiNapoli recommended the city develop a comprehensive plan to reduce the its outstanding long-term debt and take immediate steps to reduce the deficit in the general fund. The city council is required to prepare a plan of action that addresses the comptroller’s recommendations within 90 days.
May 15th - 2:47 pm
ICYMI: State Comptroller Tom DiNapoli, who will be a member of Gov. Andrew Cuomo’s new state advisory panel for financially distressed cities, is not a big fan of the idea of consolidation to reduce the number of governments in New York, which is something the governor has championed since his days as state attorney general.
During a CapTon interview Monday, DiNapoli told me he’s open to discussing consolidation of duplicative government services – IT, human resources, etc. – in an effort to help local municipalities cut costs. But he seemed to draw a line when it came to mergers or dissolutions, noting these sorts of actions have not proved popular among voters.
They’re also not popular with public employee unions, which stand to lose members through attrition or outright layoffs should governments heed Cuomo’s call and go the consolidation route.
The public employees unions, as you’ll recall, have been very supportive of DiNapoli, and their GOTV effort made the difference in his close 2010 race with Republican Harry Wilson.
It was telling that Cuomo had representatives of the state police and fire unions at his press conference yesterday, but no public employee unions were represented. You can see a divide and conquer approach emerging here – one that will no doubt be increasingly tricky for the governor to navigate as he gets closer to his 2014 re-election campaign.
“I’ve always felt that there’s more we can do in terms of promoting shared services that doesn’t necessarily involve outright consolidation where you merge municipal entities together,” DiNapoli told me.
“You know, New York has a long tradition of local control, and very often people say it sounds like a great idea. When you tell them their village is going to disappear or their school district is merging then suddenly when you have a referendum, everybody comes out and votes against it. Most of the time that’s what happens when this gets put before the voters, voters reject it.”
“But I do think there’s much more we can do. We’ve put out reports on IT, on back office operation, on bidding, on purchasing, on sharing municipal personnel. There’s much that can be done to in effect consolidate or share the services without have to get into the political battles of dissolving municipal entities.”
“So, I would like to see more discussion of that as an option.”
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 30th - 10:45 am
Overtime pay for employees at state agencies grew by almost 11 percent last year to $529 million, part of a growing tend that started in 2009, Comptroller Tom DiNapoli found in a report issued today.
Still, overtime remains a relatively small portion of the overall state payroll, accounting for 3.28 percent between 2007 and 2012, DiNapoli found.
Overtime pay in 2012 alone accounted for 3.6 percent of total payroll costs, the report determined.
But DiNapoli believes there is room for reducing overtime expenses and in a statement urged state agencies to do so.
“State agencies spent nearly $52 million more on overtime in 2012 than the year before for nearly 14.5 million hours of overtime,” DiNapoli said. “We found seven agencies with more than 25 percent of employees working overtime to meet their responsibilities. New York State policy requires limiting overtime to a minimum, and I urge all agencies to ensure that this expense is reduced whenever possible.”
Overtime at state agencies has been growing year to year for the last four years.
Agencies that relied heavily on overtime included the Office for People with Developmental Disabilities, the Office of Mental Health and the Department of Corrections and Community Supervision.
OPWDD overtime has grown sharply over the last several years, averaging seven overtime hours per worker in 2012, the report found.
Apr 16th - 12:59 pm
Comptroller Tom DiNapoli, who has teamed up with Attorney General Eric Schneiderman’s office when it comes to anti-public corruption efforts, today said he backed giving the AG’s office more power to tackle the issue.
Shortly after both took office in 2011, DiNapoli and Schneiderman have combined their offices resources of auditing and enforcement powers
The most high-profile result so far has been the indictment of now former Sen. Shirley Huntley and several others in connection with an alleged scheme to funnel member item money to a non-profit.
But as Gov. Andrew Cuomo is pushing a plan to grant district attorneys more power in local corruption cases, Schneiderman’s office still lacks the criminal prosecution power to take on public fraud cases.
Cuomo is considering a plan that would let the attorney general take on campaign-finance violations and charities bureau investigations.
“I think if the attorney general wants expanded powers to deal with public corruption, I don’t see any problem with that,” DiNapoli told reporters this morning. “Obviously we need more cops on the beat to deal with this issue. Preet Bharara has done an outstanding job and the other US attorneys, the local DAs have a role to play. But iot’s clear we still hear of more of these incidents happening. It undermines public trust and confidence so having more law enforcement rooting out corruption when it happens, I don’t think that’s a bad thing. Unfortunately, it’s a necessary thing.”
DiNapoli, a former assemblyman himself who remains popular in the chamber, said tougher penalities and public financing of political campaigns could make for a better system, even if corruption isn’t completely curtailed.
“There was always obviously some of this. But it’s always, do you think this is the last one and maybe people are going to wake up and the penalities will be more severe, and yet it keeps happening. I don’t know what the answer is, but I certainly think enhanced penalities is part of it … I do think public financing makes sense. Will any of these changes end greed? No. But it will lessen what we have now,” he said.
Mar 22nd - 12:58 pm
Nick reported this morning that state Comptroller Tom DiNapoli was successful in negotiating changes to Gov. Andrew Cuomo’s controversial proposed pension smoothing plan.
The resulting plan, which we’re told will be included in the final budget, is a modified version of the amoritzation program that DiNapoli established back in 2010 and essentially allows local governments to borrow from the pension fund to cover ballooning retirement costs over a 10-year period.
We sought comment from Syracuse Mayor Stephanie Miner, who has been very outspoken about her opposition to Cuomo’s original proposal, which she insisted would end up costing cash-strapped cities more in the long run than it saved them in the short term. We received the following statement from Miner this afternoon:
“We cannot solve the fiscal crisis facing the local governments of New York by borrowing. Unfortunately, the new ‘alternate contribution pension stabilization program’ is just that: another mechanism for borrowing.”
“We need fundamental, structural reforms to overcome the impending collapse of our financial structure. Governor Cuomo is a strong leader and has enormous political capital. We are all New Yorkers and we need the Governor to bring all parties to the table and lead a discussion on solving the long term fiscal health of our municipalities and our state.”
Cuomo’s proposal called for a 25-year amortization and enabled local governments and school districts – and, after the 30-day amendments, four public hospitals and the BOCES program – to borrow against projected future savings realized through the establishment of a sixth pension tier.
The agreement in the budget will have a 12-year payback period. 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.
Mar 7th - 11:56 am
Last month, Assemblywoman Donna Lupardo wrote to state Comptroller Tom DiNapoli seeking guidance on behalf of several schools in her Southern Tier district that are teetering on the edge of fiscal insolvency and are unclear what options they might have if they do indeed run short of sufficient cash to pay their bills.
Today, DiNapoli’s office responded to the assemblywoman, and the answer is not terribly encouraging.
Basically, according to Deputy Comptroller Steven Hancox, schools facing a fiscal crisis have one of two options: An emergency infusion of state aid, or a state control board. (Unlike municipal governments, schools are not legally allowed to declare bankruptcy).
Lupardo says she’s focused on option A, which doesn’t come as a big surprise.
A variety of Assembly Democrats – including Speaker Sheldon Silver – have been calling for additional education funding in the 2013-14 budget, and it’s a safe bet the one-house bill we’re expecting to see from the conference Monday will include an increase to the 4.4 percent bump Gov. Andrew Cuomo has already proposed.
“Additional state aid would be ideal,” Lupardo said. “That’s something I’m working on in our budget negotiations, through a more equitable funding formula.”
“Fiscal control boards remove local control and would surely be a last resort. In the absence of more state aid, and tangible mandate relief, schools will have to continue making steep budget cuts or borrow funds to meet rising expenses. They could of course try to override the property tax cap, but that is highly unlikely in fiscally strapped communities like ours.”
Feb 25th - 1:25 pm
The Citizens Budget Commission, a NYC-based budget watchdog organization, has added its voice to the list of those calling for rejection of Gov. Andrew Cuomo’s controversial pension smoothing proposal, warning it has the potential to “endanger the future financial viability of the pension plans.”
In a letter sent today to state Comptroller Tom DiNapoli and R. Michael Kraus, president of the NYS Teachers Retirement System Board, CBC President Carol Kellermann noted the existence of the short-term pension “amortization” plan adopted in 2010, which already provides cash-strapped local governments with some breathing room.
“Although the CBC opposed this legislation, it was approved and has been used by 137 local governments and the State to lower short-run pension costs,” Kellermann wrote. “Additional underfunding options are not advisable.”
“…The full funding of New York’s pension systems is a nationally-recognized strength,” she continued. “The Pew Center on the States ranked New York 5th among states for its healthy funding ratio, with assets covering 94percent of liabilities in 2010. Proposals to permit lower contribution rates, no matter how well intentioned, can lead New York to slide down the rankings to join states facing crippling unfunded pension liabilities such as Illinois and Rhode Island.”
“Briefly put, the Governor’s proposal endangers the pension funds by promising a stable rate of contributions over a 25-year period, but the State is unlikely to be able to keep that promise.”
In short, Kellermann concluded, the governor’s proposal won’t provide “meaningful, long-term relief for municipalities in fiscal distress, and endangers the viability of the pension funds,” which is pretty much the argument others – including Syracuse Mayor Stephanie Miner – have been making for several weeks now.
The Cuomo administration’s basic response to these critics has been: Your numbers are wrong, and you don’t understand our proposal.
DiNapoli has expressed concern over the governor’s plan, but has yet to formally reject it out of hand.
Feb 20th - 2:45 pm
Comptroller Tom DiNapoli just announced that the state pension fund’s rate of return in the 3rd quarter of the budget year was up 1.74%. That brings the total value of the fund to $152.9 billion dollars.
“The New York State Common Retirement Fund has seen steady growth in the second half of 2012 and is on pace for a positive return as we approach the end of the fiscal year on March 31,” DiNapoli said. “Independent reviews of the Fund reveal it is well-run and has a long-term, diversified investment strategy designed to produce positive returns in various market conditions.”
The governor’s recent pension smoothing plan has made the strength of the pension fund a hot topic of late. As Liz blogged about yesterday, Republican Gates Town Supervisor Mark Assini suggested that smoothing could lead to underfunding of the pension plan if the fund is mismanaged or the stock market takes another dive.
Assini is a guest on Capital Tonight this evening at 8pm.
Feb 7th - 1:11 pm
State Comptroller Tom DiNapoli has approved the sale of the state Thruway Authority’s bond anticipation notes in the amount of $500 million, which are intended to be used for initial payments for a new Tappan Zee bridge, while also recognizing that the authority “has no definitive financing plan for the project or for its overall capital program.”
In a letter to Thruway Authority Executive Executive Director Tom Madison, which appears below, DiNapoli notes that authority officials have said that the financing plan depends on the size, terms and conditions of the federal loan the state is expecting to receive for this project.
But, the comptroller pointed out, a recent Transportation Infrastructure Finance and Inovation Act program guide lists a detailed financial plan as one of the requirements for receiving federal cash.
“The Authority has indicated that the U.S. Department of Transportation approval for a TIFIA loan is likely,” DiNapoli wrote. “However, there continues to be uncertainty surrounding the final outcome and timing of the decision, which is critical to determining the financing plan of the project as well as the Authority’s capital program. If a TIFIA loan is approved, the Authority has indicated it will take several months before the final loan terms can be agreed upon and the loan proceeds issued. The Authority intends to use these Notes as bridge financing in the interim.”
DiNapoli reminded Madison that his agency’s outside consultant, Navigant Capital Advisors, has criticized its reliance on short-term borrowing and cited a series of “kick-the-can” policies in a May 2012 report as contributing to the authority’s weak financial position.
Recall that not long after the Cuomo administration called off plans for a highly unpopular 45 percent Thruway toll hike for commercial vehicles, the authority announced it would be laying off 234 workers – a roughly 8 percent cut in its overall workforce.
DiNapoli stressed to Madison that the Thruway Authority has a “duty” to provide a “full, timely and public disclosure” about how this project – estimated to cost about $4 billion when all is said and done - will impact the public (mostly via tolls) ASAP.