WXXI Local Stories
Tue September 23, 2008
Comptroller Warns of Troubled Waters Ahead
By Karen DeWitt
Albany, New York – State Comptroller Tom DiNapoli predicts revenues will be down even further, when the state gets more tax collection data at the end of this week.
DiNapoli says when new tax collection data is released by week's end, he expects it will contain even more bad news. He says one thing that's saved the state budget so far this year was that personal income tax collections have been running higher than expected, but he doesn't think that will last. And he says the crisis on Wall Street will continue to increase the state's multi billion dollar budget gap.
"There's a big hole right now," said DiNapoli. "That hole is likely to get bigger, not smaller."
Governor David Paterson has said he's waiting for those numbers, too, and is leaning towards bringing the legislature back once again to cut the budget.
DiNapoli says things are volatile right now, and it's hard to predict whether it will be better in a few months, though he denied that he was taking a wait and see approach to the problem. DiNapoli, a former state Assemblyman, was reluctant to be dragged into the debate of whether lawmakers should cut their reelection campaigns short to come back to Albany to further cut the budget.
"Our role is one of monitoring, and offering the best information and commentary that we can," said DiNapoli, who said he was "agnostic" on whether the legislature should return, saying it's up to the governor and legislative leaders to decide.
The Comptroller praised lawmakers for making nearly half a billion dollars in cuts in a special session in August. But he predicts that the biggest challenge facing Governor Paterson and the legislature will not be shoring up the current year's budget, but in crafting next year's budget. The state already faces a more than $5 billion dollar gap, that could grow to $6 or $7 billion dollars.
DiNapoli says leaving those negotiations to the last minute, as is commonly done in New York, could prove disastrous, though he admits it might not be feasible to start those talks until after the November elections.
"Let's be candid," said DiNapoli. "We don't even know who's going to be in all those seats to do all those negotiations."
It's possible that the State Senate could change hands from Republicans to Democrats. The Republicans currently have just a one seat edge. That could change the dynamic of budget discussions.
DiNapoli's main job is to manage the state's pension fund. He says it's not doing that badly considering what's been happening in the stock market. He says the pension fund lost money on it's investments with the now bankrupt Lehman Brothers, but those funds represent just one and a half percent of the total retirement investments.
"We're not immune from what's happening in the market, we are taking some hits," said DiNapoli, who said the large size of the pension fund has helped buffer those losses.
DiNapoli warns that while contributions from workers and state and local governments have been lowered this year, because of past strengths in the market, he may have to raise contributions to the pension fund if the present trends continue.
DiNapoli says no one at the comptroller's office is panicked over the bad economic news, but he predicts it's "going to be a troublesome year".