DiNapoli concerned about financial market instability’s impact on government budget
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- April
- 11
Volatility in the financial markets will spill over into the government’s own budget plans this year, New York state Comptroller Thomas DiNapoli said yesterday at a breakfast sponsored by The Business Council of Westchester.
Twenty percent of state revenues come from Wall Street, he told the audience at Abigail Kirsch at Tappan Hill in Tarrytown. But corporate profits are not what they used to be.
Absent a strong turnaround in the second half of this year, the employee bonus pool for the end of 2008 will shrink, DiNapoli said. Job losses in the city’s financial sector are well under way. Subprime mortgages with adjustable rates will continue to reset into 2009, extending uncertainty about when credit problems will bottom out.
Local businesspeople can take comfort in two bright spots on the economic front, DiNapoli said.
Westchester has outperformed many areas of the state in a variety of benchmarks. Job growth in the county outpaced the statewide performance, reflecting strength in financial services and construction.
Local unemployment rates were lower by about a full percentage point, and average wages are higher. While growth in property values has slowed, its size is still a good indicator of the wealth of the region. It puts Westchester in a better position to weather the current credit crunch and related problems, DiNapoli said.The other bit of good news involves the $155 billion retirement fund for state and local employees. It currently is funded at 104 percent of its expected liabilities, compared to the national average of 88 percent.
The strength of the state fund allowed the government to decrease the contribution rate levied on local government by a full percentage point last year, he said.
DiNapoli told the audience that no money has been set aside in the state budget for the estimated $15 billion that would be needed for a full reconstruction of the Tappan Zee Bridge.
The bridge project should be a priority for the state. DiNapoli said funding partnerships between government and the private sector should be explored.
“That doesn’t mean I’m endorsing that idea,” he said. “I’m endorsing discussing it.”
This entry was posted
on Friday, April 11th, 2008 at 5:26 pm by Jerry Gleeson.
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