(Airs 04/23/20 @ 3 p.m. & 04/25/20 @ 5:30 a.m.) WAMC's Alan Chartock speaks with New York State Comptroller Tom DiNapoli.
It's the Capital Connection. Hi, I'm Alan Chartock. Joining us this week is one of the most important people in New York State especially now. And that is New York State Comptroller Tom DiNapoli. The man with the facts and the figures, he wears an eye shade and he has a sharpened pencil.
Thank you, Alan. I regret we're doing it remotely. I look forward to the day when we can be back in the studio once again.
Oh, yeah, that would be good. So Tom, how are we doing in terms of money? The governor admits to the fact that we may have a what $17 to $25 billion shortfall. That's a lot. We thought we had a $6 billion before the Coronavirus. This is amazing. How do we get around that?
Yeah, and one of the challenges is, you know, we don't know. We don't know the final number. We know that the potential gap certainly is, you know, minimum $10 to $15 billions, could certainly be higher. Look, you know, the economy is basically on hold. So you don't have the kind of business activity that generates sales tax, very important revenue source to the state, localities as well. If people are laid off and not working, what's going to happen in terms of income tax revenue? So you've got the you know, the nice cushion if I could use that phrase for folks to delay paying any income tax they owe for last year from April 15 to July 15. That means money that would normally come in at this time of year is not coming in. The casinos are gaming venues are closed, so that revenue, just go down the long list and you see what the shortfall is. On the plus side if I could use that expression, we are starting to see some of the commitment from Washington come in to help us with the cost of the pandemic. Last week, we got a check for $3.8 billion. So, you know, part of the coronavirus relief fund commitment, more money coming in from Medicaid expenses. But you know, it's gonna take some time to add all this up. What I could say for sure, Alan is that this first quarter of our fiscal year began April 1. It’s gonna be really tough with cash flow. Why? Because of the impact of those revenue shortfalls. And we have big spending commitments, particularly for school aid that come up in May and in June, paying the refunds for those people who are entitled to them. So you know, that's why we're in a very tough situation, why the governor was given extraordinary powers to manage the state budget as part of the budget agreement this year.
So let's go to the way the budgetary process has been changed, at least for now. You used to pass a budget, that was the budget. Now I think we're going in quarters, am I right?
Well, there has to be very close monitoring of revenue and spending, and adjustments can be made on a periodic basis, as you point out, based on what those numbers are. Look, the governor has said and rightfully so, if we don't have the money, we're gonna have to make adjustments in the spending plan that was agreed to. Keep in mind the budget that was put together was really based on a lot of hope, in terms of the economy opening up again, more federal support coming in. But it was very clear again, because of the extraordinary powers given to the executive division of budget, the governor's office, that if the money doesn't flow in, downward adjustments can happen. So what does that mean? If the economy doesn’t pickup, we don't get more federal support, the government may have to cut the school aid, you know, lower than the commitments that were that were made. Firstly, in a sense, this budget that was put together is not a complete budget. It's a work in progress budget.
He says 20%. We may have to cut the education budget 20%. That's a lot of money.
Yeah, which will pass the state's challenge down to the local level. Look, this is why the governor's call I absolutely agree with that. I just penned an op-ed that ran this week in my hometown newspaper, “Newsday”. Washington needs to do more. We appreciate what Chuck Schumer and our congressional delegation have been doing thus far to deal with the cost of the pandemic, in terms of cost impact. Help for small businesses, for hospitals, education. However, we still have this big potential budget gap in our state budget and our localities as well. Part of the relief package targeted money to localities, 500,000 population or more. That's New York City and a half dozen localities in New York State. So you have so many other cities, counties, towns, villages in New York State that can't participate in that relief right now. The next iteration, and we know this week, they've been moving again to provide more money for small businesses and, and hospitals and for testing. But the next iteration of federal help, absolutely must include money to help states plug their budget hole because if the states can't plug the budget hole, it gets passed down to the localities, just as you pointed out, and the localities, we can't leave them hanging as well. And Alan, you know, well, so many of these local public servants are on the frontlines of dealing with this public health emergency. We can't afford to leave them hanging. We can't afford to have layoffs in essential services. That's what will happen. And Alan, what Mitch McConnell said this week…
I was just gonna go there.
Okay, go there. I'm ready.
My mother when she didn't like somebody she would say, you know, that stinking and she put a name after. So let me try that, in respect to my mother, that stinking Mitch McConnell has now said, let the states go bankrupt. Is that the most amazing thing you've ever heard as the comptroller?
It is crazy. First of all, states can't go bankrupt. Right? And why would why wouldn't in the middle of a crisis, would you want to change the bankruptcy laws to allow states to go bankrupt? What an outrageous comment! I mean, really just, this is the senate majority leader, and I'm not going to be partisan about it because my Long Island neighbor Pete King came out pretty strong on social media saying what the hell are you saying Mitch McConnell, and Pete King is right. This is not a partisan issue. It showed an arrogance, a lack of appreciation for what the states are going through. And certainly a state like New York, epicenter of this of this crisis. The states need help. They don't need political rhetoric. Maybe in some neighborhoods of Kentucky, it sounds good to beat up states like New York. We're in an emergency situation here. And that kind of discussion. Really, it's disheartening to say the least, gets my blood to boil to say the most.
Now have you been talking to the governor more than usual, since COVID has been there? I mean, he's made a big point he had to go down to the White House. He had a look at him and his son-in-law, Jared Kushner. He says he doesn't like them. They don't like him, he said, I don't know what the relationship between you and the governor is. I think it's a better one than that. But do you find yourself talking to him more than you used to?
Certainly at a staff level, there's a lot more conversation going on. And you know, in March, the governor did reach out to me directly and asked for us to come up with a new revenue estimate, you know, which was optimistic, saying it could be over a $7 billion hole and it's only grown since then. I certainly think at in terms of our offices working together, you know, respecting the independent roles, there's much more contact and much more coordination. I think, a prime example is, you know, with the Department of Labor, updating the process for processing on unemployment claims. You know, we're the last step of that process. But we've been working with them to make sure that when Department of Labor sends over the claims that we process them, we get that money right out the door for those New Yorkers, that that are out of work right now. So I think just seeing the level of coordination and response to this crisis that, you know, it should be happens certainly in a crisis, should be what happens all the time. And I think that's, that's good. And that's important. Hopefully, it's reassuring to the people the state.
Now, Tom DiNapoli, at one point, the governor was going after your operation and saying, basically hewanted to take some powers away from you, and give them to one of the guys who worked for him. Is that not happening? I mean, are we seeing less of that kind of thing happening now?
Well, you know, as you know, we did see a restoration of our contract oversight, much of it, not all of it that was taken away statutorily, but keep in mind, Alan, we're operating under emergency procedures now. So a lot of the emergency payments, some of the big dollar amounts, you know, hundreds of billions of dollars. We're not reviewing them on the front end, we, you know, as best we can, we try to review the payments. But, you know, look, we're in an emergency. So we've had to expedite payments and you know, we do the best we all can to hope that…You know, we looked at this a couple of weeks ago, the rush to get ventilators, personal protective equipment, you know, we would get calls from all over the, the state, the country of the world, you know, we've got masks, we've got this, we've got that, well, you know, who are you? Are you real? You know, let's just say that, in response to the crisis and moving as swiftly as possible with normal kinds of contract reviews that we would do, that was all suspended. And let's face it, understandably so, in the midst of a crisis, but we are trying to work out cooperatively if we see something doesn't quite look right. We know we raise it, your governor has additional people that you know, try to vet some of these opportunities, but you know, we're easily You know, around $700 million in these emergency payments to deal with this challenge. So we're all doing the best we can unprecedented territory.
Tom DiNapoli, you said, you have something called the COVID-19 financial toolkit on your website. Tell us what that is.
Well, you know, again, we're trying to be as helpful as we can to New Yorkers navigating this crisis. So I asked our staff to come up with a resource, and more and more people take advantage of the web, and the team did a good job. They reached out to some of the people who've been advising us on financial literacy issues, a good friend downstate very involved with tuning, Mitch Drazin really has helped to take the lead on this in terms of giving us guidance. But our team put together this toolkit that gives different options. So you know, I encourage people to go to our website, just google New York State Comptroller, and we highlight the toolkit in response to the COVID-19 crisis. So it talks about accessing unemployment benefits, if you need that. It talks about information about the pension system. Our retirees, you know, certainly are concerned about what's going on, trying to encourage our retirees and our state employees who still get a paper check to urgently suggest they go to direct deposit. You know, I don't know about you, Alan, but I'm not getting mail many days. You know, the post office has been impacted by this. So, so we're telling folks, and we've gotten a great response, but we still have about 30,000 state employees and just about the same number of retirees who still get a paper check. Actually we've gotten thousands of requests to go, you know, to direct deposit and we're encouraging that. Resources for nonprofits, resources for small businesses, information that we have, that you could qualify for some of the benefits that are out there. So, again, we're going to update that site periodically, but that toolkit, I hope will provide some very tangible and useful information to help people navigate through this time of great challenge and great crisis.
How are you doing personally in terms of protecting yourself? You know, most of us have been quarantined in place one way or another. We stay at home, we've been told to stay home. How's Tom DiNapoli, the state's comptroller doing?
Well, thank you for asking. I first of all, I feel well, and fortunately, in terms of my immediate family, everybody, everybody as well. Some of my sister-in-law's family has had some challenge with this with what's been going on. My sister-in-law's sister's is a nurse at the county hospital in Nassau, and she's had some exposure and some difficulty, but by and large, fine. I've mostly been in Albany. Our offices are closed except for Albany. We have a skeleton crew working here, but we do have to make sure that the payrolls are done and payments are made and the other important services of the comptroller’s office, so we can socially distance up here. And of course, I have the advantage of getting to hear your commentary every morning at 7:45. And I appreciate it and that's comforting. I go home on the weekends and check the mail and do the wash. And I wear my mask and gloves. And you know when I am home, I haven't seen my family. Easter was, Easter was I got takeout ravioli and watched Cardinal Dolan do Easter mass on my computer? So I haven't really seen my family, and I go out just if I go to the post office, or I go to the market, that's about it. So, you know, that sense of isolation that I think everybody's feeling and lack of contact, and I get through it because we're busy. I do worry, Alan, you know, for the long term. I mean, we will get back to normal at some point. It'll be a new normal, and some of the things that we enjoy, especially with the kind of work that I do, being with people with groups of people at events, gatherings, good chance, it's not gonna be like that for all for a long time even after we reopen things and, you know, there's probably a lot that we took for granted in terms of how we socialized. And I guess I'm of a generation that while it's wonderful to do Zoom and Skype and all this other stuff and texting it’s nothing like, you know, the personal contact, so I'm getting a little stir crazy as well.
Yeah, I certainly beat you there. You know, look, as a political scientist, as somebody who's studied this stuff all my life, you go back to the Russian Revolution, the French Revolution, other times, when people were really discontented, that's when you got this push for massive change. You're a bit of a political philosopher. I mean, you've been around for a long time. Everybody, all of a sudden, even the President of the United States is saying we got to pay people some money so that they can live. What are your thoughts on what's coming down here, whether we’re coming into essential political change?
Well, at the risk of sounding impolite, I hope the first political change is we have the new occupant in the White House. Hopefully people are waking up. And, you know, his daily briefings. If that doesn't scare you about who's in charge, then I don't know what will, so that's one change. Putting that aside, I think we really have to look at how we handle public health in this country. I mean, it's very clear that we're seeing disparate impacts among communities, and probably no surprise communities that already had a higher incidence of issues of obesity and diabetes and asthma and so on, typically, communities of color, that they are being impacted in a more significant way by this crisis. So what are we really doing in terms of dealing with health disparities that that we've known about? We've done reports on it, we've all talked about over the years. How can we really be sure, because I mean, look. Quality of life is one thing, but life and death is something else. And so how can we be sure that there’s equity and accessibility in terms of healthcare, and how we really ramp up our commitment to public health? And I do think this is an area where I would agree with the President. What are we going to do to make sure that in terms of supply chain issues, manufacturing, especially for essential items, and I'm not even talking about the sophisticated one, masks. What are we going to do to make sure that we can produce these kinds of items and materials right here in the United States? So we're not having to go begging around the globe or pay exorbitant prices for important medical equipment that we should have in reserve? You know, the President's saying that, Governor Cuomo’s saying that. I hope that will be an area of agreement and political change and consensus. And I just think in terms of, you rightly point out the federal government, even in spite of the McConnell philosophy, has been doing more, and more quickly than many might have expected with a divided governance down there in Washington. But in an area like infrastructure, another important area that's been talked about for a long time for coming together and an investment, look at the the MTA the importance of that, not just for downstate New York, but really for the New York economy. I mean, the MTA is on its back right now. What is going to be our commitment to not only the operating part of that organization, but the capital part, the infrastructure part? So, yeah, I think there are opportunities for us to do things very, very differently. But, you know, the tone at the top matters and I am concerned, you know, long term, what will be the tone at the top after this November?
You know, speaking of November, speaking of tone at the top, there are those people who think Andrew Cuomo should either be nominated to be Vice President under Biden, or that somehow miraculously he could be president. Let's just assume for a second. I mean, I don't think it's gonna happen, but let’s assume he moved on, would you run for governor?
Well, I think number one, the governor's made it clear that he's not moving on. And they always say I don't anticipate a vacancy in the office. And as I've said many times on your show, I have the best job in state government and, you know, I’m not looking for a future opportunity. Look, I think we have to be realistic, especially with all the other priorities that mean much more. I think the governor has made clear, don't speculate on him going anywhere. And I would say, you know, to you, Alan, I expect to be in this job, you know, through the end of this term, and look forward to running again for this position.
Wow. That's good. You know, how do you think Chuck Schumer is doing? I mean, you know, you don't hear much about him, to be honest with you. You don't hear much about him. Um, I like him. He’s a friend but…
I think we've heard a fair amount I think. Chuck Schumer, hey look he's got a very difficult hand to play, right? He's got Mitch McConnell as his counterpart. He's not in the majority, he's got Donald Trump to deal with, and Donald Trump is always you know, razzing him and calling him names. I think Chuck has delivered for New York. Now we need Chuck to deliver more. And I think he will. I think Chuck has really played the limited cards he has very, very well. We're lucky he's there. Look, nobody works harder than Chuck Schumer. You know, that Alan? And if some of that work is a little more behind the scenes now, I don't know, but I don't say I agree with you. I when I read the papers, and I see the the news releases and the national coverage. Chuck Schumer was there, front and center. I give Chuck very high marks. And I would say the same for our House delegation. We tend not to see all their individual names. But you know, I think Nancy Pelosi has proven she's a she's a tough leader. And I think she's gotten great support from our congressional delegation. So now I give them I give them high marks. Well, when I say Washington needs to do more it’s not set as a criticism of what our representatives are doing. They're dealing with a White House, you know, someone from New York who every now and then seems to be sympathetic but often is very unsympathetic to what's going on here. You're dealing with a Senate very clearly controlled by largely western and southern states that have not a lot of sympathy for us in New York. It's not easy down there. I would say we're better off in Albany than in Washington as a as a career path. Right. And they have a tough, tough task. So, you know, I'm hoping Chuck will be the majority leader next year, and that certainly will give them an opportunity to do even more. I give Chuck Schumer high marks so to your question.
I noticed you didn't mention Senator Gillibrand in that discourse.
She's out there. I mean, look, Chuck is the leader of the Democrats. So I mean, Chuck, obviously is this. He's our senior senator. He's the senior partner in terms of leadership in the Senate for the Democrats, and I think Kirsten Gillibrand ‘s been right by his side, supporting him. And again, she, you know, we see what she puts out on social media, the press releases. She's not being shy about speaking out for New York.
Right. Okay. So, you know, I don't want to give you too hard a time here but are we in bad shape when it comes to survival? Is New York in bad shape when it comes to survival? We've got a governor who says, Mr. President, you've got to give us money. You got to give the state's money. You talked about a little bit that came for the, you know, for the health care area. But what happens if we don't get that money? What happens if the guy is just really not nice?
Well, it's not just the president. It's a congress that’s a combined concern.
The President is the leader. You know, he's the guy now. As we both know, he tends to consider all public monies that go should go to the state his money, and is he being treated well?
He makes it very personal. Right. So let me say thank you, Mr. President for what you've done so far, lest he think we didn't say anything polite about him. Look, if we don't get the kind of support that we need, you're going to see short term impacts in terms of cuts and services, you're gonna see it at the state level. You’re going to see cuts at the state level, in local assistance to school districts and localities across the state. You're going to see an inability, whenever we reopen for business, for there to be a rapid return to normalcy. You’re going to see people unemployed for many, many months, and what many of us hope will be a year or two problem could end up being the defining issue, you know, for the foreseeable future. So do I think it'll be gloom and doom like that? No, I do not. I mean, look, it is an election year. And I think at the end of the day, it's not just New York. You have many other states that are that are in the same boat. So I do think there will be additional federal help. Will it be to the extent that some of us would like to see? Maybe not. We may have to trim some of our spending at the state level and that may reverberate to the local level as well. But, you know, we need to get people back to work, we need to not have our public workers face downsizing and layoff. You know, I love when I read some of the columnist from the other side of the political spectrum, well, we should be cutting all these jobs, you know, lay more people off. Whether it's private sector or public, what good does that do for any of us? We need government to be responding to this crisis. We need all hands on deck. The support for small businesses is very important. That's the backbone of our state's economy. We need New York City hopefully to open up again, tourism, Broadway, the financial markets, I mean, so much of that is what drives the revenue for the rest of New York State and you can be sure even as we reopen, New York City will probably be the last frontier in terms of getting back to whatever the new normal is. So, we will get there. Alan, I'm an optimist. We went through 9/11, horrible time. We went through the global financial crisis, horrible time. This is a different kind of crisis and the potential as we point out our budget report, for this to not be a one year challenge from a from a fiscal point of view, but it could be a multiyear challenge, and there’s a human dimension to that and so, we all need to be thinking long term but with a sense of optimism, a sense of purpose, a sense of optimism. The governor’s giving us great leadership. Our local officials, I think have been doing a great job. I was at County Executive Dan McCoy's briefing the other day. I mean you know what he's doing in Albany County. You’re seeing and you know, county execs and local officials across the state. Our schools, our teachers are doing the best they can with the remote learning. All hands on deck with New York, we’re going to get through it,
Now I have almost no time left. But I want to ask you one last question. I got a couple of people at WAMC, environmentalists, who are saying you should be disinvesting. You and I've talked about this 45,000 times, disinvesting in oil and petroleum products. Are you going to do that?
Well, we need a further discussion. So you get David to invite me back on the show. But I as I've said before, we have the most responsible environmental, social and governance policy of any public pension plan in the country. We're a well-funded plan going through a very difficult time, but we're going to get through it. Our Climate Action Plan that we've developed pursuant to our advisory panel recommendations is a very forward thinking approach to do right by the climate change issue, and still keep our pension funds strong. Our next show, Alan, will spend more than a minute or two on it. We're doing the right thing and I'd be happy to talk about it at greater length.
We are out of time. Our guest has been one of my favorite people in politics, Comptroller Tom DiNapoli. Tom, thank you so much for joining us and Madam Birnbaum would be very proud of you.
And Madam Birnbaum would want you to stay safe and stay well Alan, we love you.