* Comptroller concerned with "backdoor borrowing"
* Cuomo official says comptroller "totally gets wrong" some
* New point of contention between two Democrats often at
By Hilary Russ
Feb 13 New York Governor Andrew Cuomo's proposed
budget will increase debt through "backdoor borrowing" and give
the governor new powers that could reduce accountability, the
state's top fiscal official said on Wednesday.
"We need more effective debt reform that gives taxpayers a
voice in balancing the costs and benefits of any new borrowing,"
New York State Comptroller Thomas DiNapoli said in a statement.
Cuomo's proposed fiscal 2014 budget includes a plan use $750
million from the state's workers compensation insurance fund for
capital and other needs, expand public-private partnerships and
increase by $3.3 billion the borrowing ability of the state's
public authorities, DiNapoli said.
DiNapoli had some praise Cuomo's proposal, saying it
restrains spending, cuts one-year projected budget gaps, and
funds needed infrastructure projects, including Superstorm Sandy
The governor presented a $136.5 billion budget in January
that would boost education spending and close a $1.3 billion gap
without raising taxes.
The state legislature has to approve a budget before the
state fiscal year begins on April 1.
DiNapoli's report elicited a strong reaction from Cuomo's
budget director, Robert Megna.
"The comptroller's staff did him a disservice on some of the
comments that were made in this report, which we think
misrepresents or just totally gets wrong some of the things that
are in the budget," Megna said in a telephone call with
Cuomo and DiNapoli, both Democrats elected to their offices,
have butted heads several times.
DiNapoli criticized Cuomo's last budget on similar
transparency grounds, as Cuomo narrowed DiNapoli's oversight of
certain contracts. Cuomo said he did it to streamline
government, and DiNapoli said it would hamstring his ability to
kill bad contracts.
It is also the comptroller's job to be a watchdog about
fiscal issues, said long-time New York Democratic strategist
"The comptroller and the governor have had at best a
contentious relationship," Sheinkopf said.
Deputy Comptroller Robert Ward said that for the current
year, annual issuance of state-supported debt was $4.4 billion.
Now, the governor's office says that figure will be closer
to $5.1 billion on average annually.
"We don't know how to read that other than to say that's an
increase," Ward told Reuters, who called Megna's reaction
"We were frankly surprised at the intensity of the response
to a pretty straightforward issue," Ward said.
BUDGET DETAILS CRITICIZED
Under Cuomo's plan, the state would create a new $1 billion
annual revenue bond financing program backed by sales tax
revenues. The new bond program - along with existing New York
bonds backed by the state's personal income tax revenues - would
fund infrastructure and other capital projects, DiNapoli said.
Such bonds, unlike general obligation debt, are issued by
public authorities and don't have to be approved by voters.
Cuomo also proposed eliminating financial reporting
requirements for New York cities, counties and school districts,
which have long complained that such state mandates are
But that proposal could eviscerate one of DiNapoli's most
cherished initiatives, which monitors fiscal distress among
local governments, just as it is getting off the ground.
Megna disputed DiNapoli's claim that debt levels would rise.
Megna said the proposed budget would actually shrink the state's
debt load to 4.6 percent of personal income from 5.5 percent.
Megna also said that Cuomo's proposed reforms to the state
workers compensation insurance program would eliminate some
That would allow transfers from the workers compensation
fund to be safely be used for other measures, including debt
reduction, without acting as one-time budget fixes that would
create future revenue holes, Megna said.
Such a use of funds would be acceptable, Ward said, except
that the language in the budget also allows the governor to use
the insurance fund money for other purposes.