The state comptroller says the $5 billion in extra money that New York is reaping from the bank settlements should not be viewed as a surplus, and should not be spent as though there will be more money coming in the future.
State Comptroller Tom DiNapoli says the $5 billion-plus pot of money due to settlements with banks and other financial institutions over alleged wrongdoing in the Wall Street crash should not be looked at as a budget surplus.
“I wouldn’t call it a surplus,” Di Napoli said. “It’s really more a windfall.”
And so, the comptroller says, it should not be used for recurring expenses, like tax cuts or increased school aid, as some legislators have suggested.
“If you use some of that money for school aid today, you’re going to have a hole down the road,” the comptroller warned. “You’ll just get back to creating out-year budget gaps, which caused so many of our problems in past years.”
According to the comptroller’s projections, the state still has a structural deficit of nearly $2 billion for the upcoming budget year, though Governor Andrew Cuomo has promised to hold spending increases to below 2 percent to prevent that from happening.
Cuomo and legislative leaders have all said they want the $5 billion to be kept separate from the budget and placed in an infrastructure fund. DiNapoli says that would be a “smart” use of the money. He says it could also be used to pay down the state’s high debt, or to create a trust fund to pay for retiree health insurance costs.
The governor and lawmakers have not yet defined what exactly they mean by infrastructure. Projects range from economic development aid for troubled regions, to funding the $4 billion dollar new Tappan Zee Bridge on the New York State Thruway over the Hudson River. Governor Cuomo has not yet detailed how he will pay for the bridge, which is already under construction. Comptroller DiNapoli, who has had an increasingly tense relationship with the governor, criticized Cuomo for not being more forthcoming.
“That is a key missing piece,” Di Napoli said. “We should have had that information already.”
The comptroller is currently auditing the Cuomo Administration’s contracts with advertising firms that were paid millions of dollars in state funds to air ads promoting New York’s Open for Business campaign, and a tax abatement program to attract new start-up businesses. Critics, including Cuomo’s opponent in the 2014 elections, says the ads were political in nature and aimed at boosting the incumbents governor’s standing.
The comptroller would not say whether he thinks the ads were an appropriate use of taxpayer money.
DiNapoli says he does not expect that the audit will be completed before the end of the year, but he says it will be ready soon.
“Stay tuned,” he said.
