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On the Home Front, New York State Comptroller Tom DiNapoli

A Warm Welcome from GN Chamber of Commerce

With diplomacy, but firmness, New York State Comptroller Thomas DiNapoli, at a Great Neck Chamber of Commerce breakfast last week, reaffirmed that he would protect the office of the comptroller’s role in providing “transparency, accountability and oversight” for state government. This affirmation was in response to Governor Andrew Cuomo’s budget proposal that would end the long-standing authority that the comptroller’s office has to approve any state contract above $50,000. “We don’t need to sacrifice transparency for so-called efficiency. Our office pre-audits these proposed contracts and often derive savings through the process,” he remarked.

On the other hand, Mr. DiNapoli supports aspects of the governor’s budget because “it doesn’t rely on accounting gimmicks.” He also praised the governor’s regional approach to economic development since the regions of the state are so different.

The Record asked if the comptroller’s office would take any role in the hydrofracking issue that is being hotly debated. Mr. DiNapoli said that his office would weigh in on two fronts. First, he is proposing that if hydrofracking is allowed in New York State that a fund be established, similar to the Oil Spill Fund his office administers, that funds cleanups and compensations for spills. The oil fund receives money from a license fee charged on each barrel of petroleum sold in NYS at 8 cents per 42-gallon barrel and reimbursements from spillers. A similar structure could and “should” be developed for gas companies.

In addition, Mr. DiNapoli said that his office, as a major investor, engages companies in a dialogue regarding risky practices, asks questions about emergency preparedness and “well by well” disclosures regarding chemicals being used for fracking. He said, “If this comes to pass, we know that there will be accidents...let’s be prepared.”

Chamber President Hooshang Nematzadeh recounted the responsiveness of Mr. DiNapoli in discussions several years ago about divesting investments with companies doing business in Iran and Sudan. The comptroller’s office investigated these companies in 2007; it was a lengthly and comprehensive evaluation that resulted in an $86.2 million divestment.

The New York State pension fund is the third largest in the country and the tenth in the world with an estimated value in June 2011 of $146.9 billion. Mr. DiNapoli is eagerly awaiting the numbers for the rate of return which will be announced in March.

The pension fund has been in the headlines lately regarding big payouts. But Mr. DiNapoli pointed out that 70 percent of the pension benefits pay out $30,000 a year or less to the recipients. “Our economy benefits when people can retire with dignity.”

Investments in New York State by the pension fund are also on the increase. He said, “We vigorously investigate the businesses.”

In regard to New York’s economy, he said, “It’s a very mixed picture, more good than bad, but challenging...progress is incremental and slow...We’re seeing employment improve in the private sector, but are seeing a contraction in the public sector...better here than other states, but it’s an uneven picture across the state. The suburbs have not done as well as other areas. Unemployment is at 8 percent which is lower than the national rate of 8.5 percent. The unemployment rate for Long Island is 6.9 percent.  Long Island has lost 2500 jobs … that’s a big concern. Wall Street is still an important part of our economy...we need it to be profitable. We project that Wall Street will lose about 10,000 more jobs.”

Mr. DiNapoli touched on other indicators: In 2011, state sales tax collections rose by 4.5 percent. “Certainly good news with Long Island contributing 18 percent of the sales tax statewide.”

It was no surprise that the housing market is mixed too. New York was not hit as hard as the rest of country in the foreclosures, but “it has been hard for those affected... Some of the upstate communities never had the housing bubble we had on Long Island … we had further to go down when it burst.”

Recovery? “First, we must have the state’s fiscal house in order...There are tough choices about spending. We still have a gap, but not as bad as last year.”  He added that there must be a financial plan that is long term for state and local governments.

He also believes that investment in the infrastructure is one of the best boosts to the economy that results in tangible benefits. He is suggesting that the state develop inventories of infrastructure needs with priorities so that if stimulus money were made available again, we would be ready.

Biggest risk to the financial plan? We must follow international as well as national monetary trends. Personal income and sales tax revenues are critical and vulnerable.

Cuts from the federal government are also a potential risk.

He urged everyone to visit the comptroller’s website: www.osc.gov for much more information about the recovery and all the programs administered by his office.

Comptroller DiNapoli concluded, “We have many challenges in New York, but we are better positioned to deal with them today than we were a couple of years ago. There’s a different spirit in the state capitol and I give credit to the legislature and the governor for that. We see less partisanship and a willingness to make tough choices. The budget actually got done on time last year! All rosy? No... The comptroller’s office wants to inform the larger debate and to be a partner with local governments, the business community and not for profits...For me, as a kid from Long Island,  to have one of the better ringside seats in state government today is a privilege and an honor. Thank you Great Neck, for giving me the opportunity to be in the position I am today.”

(Editor’s note: Mr. DiNapoli’s remarks were taped by Public Access. Watch for listings in this paper for the times when his speech and the question and answer period will be shown. -CF)