While the economic picture for the state of New York is darkening due to the credit crunch, downturn in Wall Street bonus payments and decline in real estate values, state Comptroller Thomas DiNapoli said he expected the mid Hudson Valley to weather the storm without too much difficulty.
“Ulster County has been in a stronger position than other counties,” DiNapoli said. Statewide, if the downturn “is limited to two to three quarters, we”™ll get through it. The real question is whether or not this translates into an opportunity to make intelligent decisions with a long-term benefit.”
The comptroller made his remarks during a visit to the Kingston office of Assemblyman Kevin Cahill, D-Kingston. Earlier in the day, he”™d spoken with Ulster County business leaders.
“There”™s a lot of concern about New York”™s high debt burden,” DiNapoli said. Legislation was being drafted to put a cap on the debt. DiNapoli said improving the state”™s infrastructure of roads, bridges and dams was another priority, requiring financing that he characterized as “good debt.”
“We need to put more capital to work within the border of New York state,” he said.
DiNapoli said the state”™s pension fund didn”™t have direct exposure to the riskier investment vehicles in the market, such as collateralized debt obligations. “Big investments in financial firms, including Countrywide, have a negative impact on markets generally. However, we came into this fully funded and with a strong conservative investment strategy. We are not having the crisis other investors are facing.
“We could have a little more robust regulatory framework,” DiNapoli added. “It”™s been a roller coaster in the last few months.”
In February DiNapoli issued a press release about the Empire Zone program. It said that the state had done a followup to a detailed 2004 report on eight Empire Zones and had found that the zones were still failing to hold certified businesses to standards of accountability. However, DiNapoli said he had been “hearing positives of the program” from Kingston Mayor James Sottile and local business leaders. “We have to question whether the benefits to the community are real, and if they aren”™t, we need to reconsider those benefits,” he said.
DiNapoli said that the Empire State Development Corp. is in the midst of revamping the Empire Zone program to ensure it was resulting in the job creation and private investment the beneficiaries promised. In 2006, state spending for the Empire Zone program mushroomed to $600 million from $30 million in 2000.
DiNapoli said his office was also seeking more accountability from local industrial development agencies. In Ulster County, the IDA for years operated with what was in essence a blank check, said Cahill. Clearer goals, careful record keeping and better monitoring to ensure the companies that receive IDA financing are benefiting the local economy are needed, he said. Operating in 116 municipalities across the state, the IDAs also overlap in some cases and need to be run more efficiently.
“We need to get rid of the bad problems, but not the good stuff,” said Cahill. “There have been a lot of issues about whether there was a positive outcome for the state and communities. We don”™t want to stop them, but we need to balance satisfying all the parties.”
Cahill said the Assembly has been pushing “for new levels of accountability.” Currently there is no uniform standard, he said. The IDAs, which are linked to a town, county or other municipality, need to incorporate more transparency into their dealings, he said.
Asked whether he would follow up on a report by his predecessor that was highly critical of the business plan of Crossroads Ventures for the large ski resort it plans to build in the Catskills, DiNapoli said no. Cahill said according to Governor Spitzer”™s agreement with Crossroads Ventures, which was announced last September and includes an expansion of the adjoining state-owned ski center, a “full environmental review process will be undertaken,” which would be sufficient to address any outstanding issues related to the impact of the project on the surrounding area, he said.
DiNapoli said his office has so far audited 260 school districts around the state and plans to have them all audited by 2010. “We”™re on track and have gotten additional support from the (state) Legislature,” he said. So far, his office has found that “some school districts are managed well, others show weaknesses.” He said the state was providing financial training to school board members and is posting its reports on the audits on the comptroller”™s Web site.
