DiNapoli addresses state's financial shape
Jan 10, 2018
State Comptroller Tom DiNapoli got right to it Tuesday morning.
"I think we are headed for a very, very problematic budget season," DiNapoli told an audience at the Hearst Media Center.
He cited a looming state budget deficit, the potential impacts of federal tax changes and recent calls from Gov. Andrew Cuomo for the state's pension fund to divest from the fossil-fuel industry and companies that can't achieve gender balance in their leadership.
He cautioned, as state leaders have for months, that the overall budget picture is complex and is complicated by federal tax changes/changes to other programs. He's also cautious about the boom in the markets, but said the rally will end at some point.
DiNapoli says that even stronger than anticipated revenues from Wall Street will not wipe out the budget deficit or dispel the uncertainty. Still, he says Wall Street revenues will be one of the "bright spots" as the fiscal year closed out in March.
The big vulnerability is health care," he said, referring to the federal impact.
He also said Republican House members in New York are "all going to be held accountable," noting that even if they rebuff certain federal changes (notably tax reform) they still vote for House leadership that goes along with these changes.
When it comes to Gov. Cuomo's proposed changes on how the state pension fund invests, namely his desire for the fund to divest from fossil fuels, and to change investment strategies to promote diversity in corporate boardrooms, DiNapoli was measured in his comments.
"At the end of the day, my responsibility is ... to make sure we keep the fund well-funded," he said.
DiNapoli notes that because the pension fund is a public fund, people have opinions on how to invest. "We don't mind the discussion."
"We do like our money to go for good purposes and causes," DiNapoli said. (Recall he has pressed Exxon on climate change as an investor). "What we believe as a long-term investment ... investing in companies that are good corporate citizens on most measures makes sense."
"I'm totally supportive of the Paris agreement," DiNapoli says of fossil fuel investments. "But the notion that we're going to lead the fight on climate change by making the pension fund sell all their energy stocks to me seems like not the smartest strategy."
"We rarely divest, we prefer to be an investor and we engage with companies (like Exxon). We would lose that leverage if we're not at the table anymore as an investor," he said, noting that the process of divesting is a long one.
He also said the last group he wants to dictate pension fund investments is the state Legislature, because the political forces would be dangerous. He asserted that he is an independently elected official and that will not be compromised.
DiNapoli said he doesn't sense a great appetite to raid the pension fund to help fund the state budget, "but I wouldn't put anything past anybody."
DiNapoli called for public financing of elections: "Democracy works if you have a competition of ideas," he said, adding money is an impediment for many people who want to jump into politics.
Regional development DiNapoli says his office will be doing more audits in this arena and that he favors programs that don't pit regions against regions, the way it is currently set up.