Comptroller DiNapoli Speaks on New York State Finances

By Mary Alice Miller
“Deep uncertainty surrounding tariffs, the economy, and actions in Washington casts a long shadow on this budget,” said New York State Comptroller Thomas D. DiNapoli in response to news that the state budget has been finalized.
DiNapoli cautioned that “Market volatility and declining business and consumer confidence may upend the state’s revenue projections and increase the already sizeable out-year budget gaps.”

“Retirees shouldn’t worry. Our plans are very well funded. In response to the volatility in March and early April, we didn’t make any changes in terms of how we invested. We have a very conservative long-term investment goal,” DiNapoli told Our Time Press in a recent interview. “Our state fund, the last time we did a valuation, we were over 93% funded. New York pension funds are in the top tier nationally.”

New York State tax revenues have been coming in higher than projected. “Part of that is because Wall Street had a very good year for the bonus pool, and the profits are higher than have been projected, but that is for the situation today benefiting from the performance in 2024,” said DiNapoli.

DiNapoli did say that he would have liked to have seen, as part of this year’s state budget, some of the money coming in beyond what was projected to put some of it in a special reserve to deal with possible federal cutbacks.

But New York experiences a lot of foreign trade activity. A Report from the comptroller’s office outlines imports and exports in the New York City area, with Canada, Europe, and East Asia (specifically China) being the state’s biggest trade partners.

DiNapoli sees the impact of a decrease in tourism on upstate New York, not just people coming in for a week to stay in New York from Canada but also people who would usually just come into the U.S. for a day trip to go shopping.

“It’s too soon to see what the numbers are in terms of a real impact of the disruption of tariffs [and] what that means [for] foreign visitors, foreign spending, the cost of imports,” said DiNapoli. “At the end of the day, it really affects consumers. Consumers will not have the supply. [But] it’s not just the empty shelves. They will also have to pay more for these goods and services.”

DiNapoli’s office recently issued a report that analyzed all the federal dollars for specific programs that come to New York City. “A lot of it is housing, social assistance, education. [It gives] a sense about what potentially is in jeopardy,” he said.

For the state, DiNapoli said the most significant hit would be Medicaid. “If the most extreme cuts were to happen, the state’s not going to have the money to fill that hole,” he said. “This is really a concern because, particularly, the most vulnerable New Yorkers – those needing housing assistance, Title 1 funding for students, the Medicaid program, people who need that care – those are the programs that potentially are in the most jeopardy.”
The other issue that is still being debated is the cap on SALT deduction, the state and local tax deduction. “That really hurt New York,” said DiNapoli.

DiNapoli added, “The concern is that they will target blue states like New York on this kind of program and do these cutbacks to fund their tax cuts for wealthier Americans. That, from my point of view, is totally unacceptable.”

The solution is political from DiNapoli’s point of view.
“We are all trying to figure out how to respond to these very hurtful threats to cutbacks. Unfortunately, we don’t have Hakeem Jeffries as Speaker of the House, which we were hoping was going to happen and still think it will happen sometime soon, but it is not there yet. Chuck Schumer is no longer the majority leader. And for now, Trump seems to have a great deal of sway with the House and Senate Republicans,” said DiNapoli.

“The only hope I think we have, especially in New York, is that those handful of Republican members of Congress who will be up for reelection next year from Long Island and Upstate New York, that they will feel the pressure if severe cut backs go through and their constituents get hurt that they will be voted out of office, and because the Republicans have such a slim lead – there are two seats on Long Island and a couple of seats upstate you could flip House of Representatives right in New York,” said DiNapoli, adding, “So if they go too far they could lose there majority just in New York, not counting the other states.”

Regarding innovative responses to potential cuts to federal funding like the RECOURSE Act sponsored by mayoral candidate State Senator Jessica Ramos and Assemblyman Micah Lasher, DiNapoli said, “It’s a bill. It hasn’t been adopted.
My understanding of the bill is that what triggers it would be the federal government implementing cutbacks in defiance of a court order.

DiNapoli explained, “I think the problem is – and I am not a lawyer – but the question is, would the state have standing under the U.S. Constitution where the federal government has supremacy to do something like that. So if they do the cutbacks, we’ll end up in court. [Attorney General] Tish James has already been very effective in bringing suits to stop Trump’s excesses. The state will sue the federal government over cuts. The federal government could sue is if we try to hold taxes back. You could spend a lot of time where lawyers will be working all this out.”

DiNapoli likes a different response.
Recently, Maryland Democratic Congressman Jamie Raskin came to a Republican district covering Patchogue, Long Island, and had a town hall meeting because the Republicans don’t do town hall meetings anymore because everybody comes out and yells at them,” said DiNapoli. “I think it is going to get back to political pressure on a handful of New York Republican members of Congress that are in these marginal districts, to keep the pressure on them to make sure that they soften, if not eliminate, the kind of cutbacks that Trump is talking about.”

In the meantime, DiNapoli said, “We certainly keep looking, reporting, analyzing.
We have nothing in my power directly to stop it, but we are going to keep shining that spotlight on what’s happening.”