GLENS FALLS — New York State Comptroller Thomas DiNapoli believes the state’s economic development initiatives are fragmented and lack oversight to determine if the goals of the programs are being met.
“We’re very good on the front end with the press release and the ribbon-cutting, but not so much on the back end,” he said Monday in a meeting with The Post-Star editorial board.
DiNapoli, a Democrat, said ways are needed to measure the success of economic development programs.
“If it’s falling short, don’t throw good money after bad,” he said.
DiNapoli’s department has conducted audits of programs run by various state agencies, including New York Power Authority and Empire State Development, to see if the state is getting a good return on its investment. It has faced criticism from those agencies, with officials saying his department does not know what it is talking about.
“Our audits can’t force a change. Our audits are recommendations,” he said.
In some cases, DiNapoli said, the department’s oversight was taken away by legislative action, such as in the case of the SUNY and CUNY projects, in what was billed as an effort to streamline the economic development process. That legislation preceded the recent corruption scandals involving former SUNY Polytechnic President Alain Kaloyeros and many others.
Those corrupt schemes may not necessarily have been caught if there had been oversight by the comptroller, but at least another set of eyes would have been looking at the contracts, he said.
Bills now stalled in the Assembly and Senate would restore oversight and prohibit setting up nonprofit entities as a way to funnel money toward state projects without oversight and would establish a “database of deals,” listing state economic development contracts.
When asked if Gov. Andrew Cuomo supports either of these bills, DiNapoli replied: “You’ll have to ask him. It seems not.”
No overarching economic development plan seems to exist, he said. Some of the initiatives, such as the governor’s Regional Economic Development Councils — dubbed the “Hunger Games” by critics — seem similar to the member item grants legislators used to be able to obtain for their districts but packaged in a different way.
One piece of legislation that passed a year and a half ago allows IDAs to take back benefits, such as tax breaks, if companies do not produce the jobs that were promised.
Starting later this fall, he said, his office will be auditing IDAs across the state to see how they are complying with the new law.
Pension fund strong
DiNapoli said the state pension fund is strong at about $209 billion, which is an increase of $100 billion from the low point of the financial crisis of 2007-2008.
The plan is about 98 percent funded to cover future obligations. It is one of only four pension plans in the country over 90 percent funded, DiNapoli added.
He credited the success of New York’s pension fund to the fact that neither the executive nor legislative branch set the retirement contribution rates. In other states, the rates have been manipulated for political purposes.
As the investments have grown over the past decade, he has been able to decrease the employer contribution rates, DiNapoli said.
About 1.1 million New Yorkers collect a public pension, he said. The payouts have grown as people are retiring at higher salaries. The average pension is about $23,000, and 80 percent of the recipients continue to live in the state.
Fossil fuel investments
Some people have called for the state to divest completely from fossil fuel companies. DiNapoli said a more pragmatic approach is needed.
“We feel we lose our voice if we’re not invested,” he said.
The state is pushing for companies to do more to curb greenhouse gas emissions and work toward a low-carbon emission society.
“Some companies have worked with us and others give lip service,” he said.
A decarbonization panel is working on recommendations about how to “decarbonize” the pension fund. He is not sure if they will recommend a full divestment.
The state has a limited number of investments in green energy companies through a fund that supports green industry.
DiNapoli said the state pension fund managers look at a company’s record on the environment; social issues such as increasing diversity in the workforce and on corporate boards; providing fair wages; and its governance when making investment decisions.
The state lobbies these corporations, writing letters to the boards to put some pressure on and, in some cases, files lawsuits. The state is particularly trying to increase the number of women serving on corporate boards, he said.
There have been some cases in which the state has divested. After the Sandy Hook school shooting, the state divested what little stock it had in gun manufacturers, he said.
With so much money in the pension fund, the potential for corruption is large. One problem involved the use of “placement agents,” middle men who steered the state toward investment firms.
“Certain favored people were getting all the business,” he said.
The department adopted a policy to ban placement agents, and Cuomo signed legislation this year.
It is important the pension fund operations be transparent and to stay vigilant, DiNapoli said.
DiNapoli is seeking a third, full four-year term. He was appointed by the Legislature in 2007 to replace Alan Hevesi, who resigned, following a scandal. DiNapoli was elected to full four-year terms in 2010 and 2014.
Also running in the race are Republican Jonathan Trichter, Green Party candidate Mark Dunlea and Libertarian Cruger E. Gallaudet.