Yesterday, Harry wrote an open letter to Comptroller DiNapoli. See the letter below:
June 28, 2010
Dear Comptroller Thomas P. DiNapoli:
I am writing to you about your plan, as reported in the New York Times and elsewhere, to allow the State to borrow nearly $5 billion (and counting) to make required annual payments to New York’s pension fund. Your plan would allow local municipalities to borrow even more. And in a breathtaking example of Albany accounting at its most shameless, you would borrow the money from the same pension fund to which it is owed.
Of course, the State and local municipalities would have to pay back all the money plus billions more in interest. And the fiscal impact of the borrowing, according to your own figures, would be to triple pension contribution rates over the next five years. Talk about kicking the can down the road.
But I believe the real devil here is in your assumptions, because the plan’s true costs are as yet unknown and depend heavily on the performance of the State’s pension fund. As a result, it is imperative that you release all your assumptions, so taxpayers can evaluate the plan’s merits with the facts in hand.
For example, according to previous reports you have not disputed, your office is—fantastically—assuming a repeat of market conditions after the 1987 crash, including the halcyon years between 1988 and 1998 when returns averaged 14%. As I’m sure you know, if the market underperforms that rate—or what amounts to the best ten-year span in the fund’s history—then your plan’s reported costs could be dramatically higher.
Is this really your assumption, Mr. DiNapoli? If not, why haven’t you disputed it? If it is, have you considered the implications?
I have. And assuming the same asset mix as the current pension fund portfolio and making fair predictions for returns on fixed income and alternative investments, equities would have to skyrocket. In fact, the Dow would have to hit 80,000 by 2022. Eighty thousand.
No responsible investment advisor in the world thinks that is possible, but—if this is indeed your assumption—you are betting billions on it, with taxpayers on the hook if you lose.
Ironically, your own office assumes investment returns of 8% a year for all other purposes, and one would be hard pressed to find a responsible investor who thinks even that’s feasible for a large public pension fund.
As sole trustee of our pension system, you are responsible for protecting its long-term integrity. That means looking beyond this election year at what could happen later on if wild assumptions miss the mark.
Should the fund return anywhere less than an astounding 14% average over the next ten years (again, your assumptions as described in previously published reports), it would mean huge financial pressure on the State and municipalities and a mountain of new debt. Both of which could lead to substantial underfundings. California and New Jersey underfunded their pension systems in years past and face the real possibility that their retirement funds will run out of cash.
We cannot let New York go down that road. The injured parties would be state taxpayers, since future pension shortfalls would be borne by these unsuspecting New Yorkers. Of course, that would happen just after the end of the next four year term for statewide officials.
New Yorkers need the facts from their chief fiscal officer. You should disclose the assumptions surrounding this borrowing plan as well as its costs under a range of realistic market conditions. Only then can the public evaluate it on the merits and understand its full risk.
Sincerely,
Harry J. Wilson
Posted by Team Wilson on 06/29 at 09:10 AM in
(1) Comments •
Permalink
Unelected NY Comptroller has remained silent about withholding lawmakers' paychecks even though Albany has yet to pass a budget(the deadline was this past April). DiNapoli's loyalty is being tested: will he chose the taxpayers of New York or political patrons that appointed him to the office?
Posted by Team Wilson on 06/28 at 03:08 PM in
(0) Comments •
Permalink
The Times Union has an interesting piece today in which a spokesman for Harry's opponent ties himself in knots trying to explain away DiNapoli's position on short-term borrowing (see also: the pension raid plan). While DiNapoli was the one proposing this plan last year, our unelected comptroller disagrees with his policy in an election year when he's held accountable to voters. Here's an excerpt:
(DiNapoli Spokesman Dennis Thompkins) said that DiNapoli opposes the governor's plan for short-term borrowing, which was a component of an early version of a plan he is now pushing legislators to adopt that allows governments to adjust contributions over time, overpaying when increases are small and underpaying when they rise.
"We proposed this last year, we thought it was a good way to protect local taxpayers from local spikes," Tompkins said.
Harry is being honored at The Union League Club. The cocktail reception will highlight Harry's accomplishments as a successful businessman and nationally recognized restructuring expert. More information is listed below:
Wednesday, June 30, 2010
$1,000 VIP Reception
5:30pm – 6:30pm
$250 General Reception
6:30pm – 8:00pm
The Union League Club
38 East 37th Street
New York, New York 10016
Harry is being honored at The Union League Club. The cocktail reception will highlight Harry's accomplishments as a successful businessman and nationally recognized restructuring expert. More information is listed below:
Wednesday, June 30, 2010
$1,000 VIP Reception
5:30pm – 6:30pm
$250 General Reception
6:30pm – 8:00pm
The Union League Club38 East 37th StreetNew York, New York 10016
Former New York City Mayor Ed Koch had some kind words for Harry today, and he wanted to share them with you:
I applaud Harry Wilson as a “Hero of Reform” for signing the three New York Uprising pledges. This year voters are counting on candidates to commit to specific reforms in advance, as Harry has done. I look forward to working with him to see them swiftly implemented should he be elected. ~Ed Koch (former NYC Mayor)
Posted by Team Wilson on 06/22 at 11:18 AM in
(1) Comments •
Permalink
Harry warned lawmakers in Albany today to reverse course on the pension borrowing scheme. Wilson argued that the move jeopardizes pensions and could lead to an even bigger, more disastrous financial black hole in the future. His analysis of the proposal is below:
1. The State will borrow over $4.5 billion, and local governments will borrow in excess of $6 billion, totaling roughly $11 billion in borrowing;
2. The associated interest expense, assuming the midpoint of the publicly stated range, or 5%, will be in excess of $3 billion for the state and local municipalities combined;
3. Once the amortization plan expires, the State's annual pension payments, plus interest, will jump to more than $3 billion, vs. approximately $1 billion today. In short, a problem that is deemed unaffordable today will be three times worse in just six years. Local governments will face a similarly dramatic increase in the size of their obligations.
4. It has been reported that these scenarios are based on the State Comptroller's expectation that pension returns going forward will mirror returns from the period after the 1987 market crash. If those reports are correct, based on the current portfolio mix of the pension fund, the Dow Jones Industrial Average would have to hit 80,000 by 2022. If, instead, the Fund is basing its projections on its current, but also overly aggressive, 8% return assumption, then the Dow would have to hit nearly 30,000 by 2022. Both of these return scenarios dramatically exceed recent history and the expectations of professional investors. This enormous disparity highlights how important the Comptroller's assumptions are to the policy debate, and he should provide transparency so that voters can evaluate exactly what he is proposing.
Posted by Team Wilson on 06/21 at 02:53 PM in
(1) Comments •
Permalink
Today at 1:30 p.m. in Room 130 at the legislative office building in Albany, Harry will speak about Tom DiNapoli's brainchild, the reckless pension borrowing scheme.
It's a bad idea for taxpayers: come on out to the news conference this afternoon to find out more.
Posted by Team Wilson on 06/21 at 09:52 AM in
(1) Comments •
Permalink
Chairman Cox describes Wilson, along with others, as "fantastic, dynamic, and principled" to challenge the corrupt Democrat establishment. A Siena poll reflects that New Yorkers want accountable, open and
honest government, demanding solutions rather than rhetoric. Wilson represents bold new leadership. An excerpt from the Suffolk County Republican:
The Siena poll shows clearly that the forgotten taxpayers and voters of New York of all political stripes are coming to the realization that the party presently in power is the problem, not the solution. The poll also shows swing voters defecting the Democratic Party in droves with none of the Democratic state-wide candidates receiving a majority of Independent voters’ support. The Democrats control everything in Albany and in Washington, and their elected officials have forgotten that they hold a public trust to serve the people, not the special interests who have “paid to play” with them.
Chairman Cox describes Wilson, along with others, as "fantastic, dynamic, and principled" to challenge the corrupt Democrat establishment. A Siena poll reflects that New Yorkers want accountable, open andhonest government, demanding solutions rather than rhetoric. Wilson represents bold new leadership. An excerpt from the Suffolk County Republican:
The Siena poll shows clearly that the forgotten taxpayers and voters of New York of all political stripes are coming to the realization that the party presently in power is the problem, not the solution. The poll also shows swing voters defecting the Democratic Party in droves with none of the Democratic state-wide candidates receiving a majority of Independent voters’ support. The Democrats control everything in Albany and in Washington, and their elected officials have forgotten that they hold a public trust to serve the people, not the special interests who have “paid to play” with them.
Posted by Team Wilson on 06/18 at 03:09 PM in
(1) Comments •
Permalink
In the spotlight today: John Brodigan, host of The Right Hook and New Media Director for NYSYR, is a big supporter of Harry's, and he runs JohnBrodigan.com, where you go get his latest insights. He also contributes on TechRepublican.
I’m really excited about Harry Wilson’s campaign. Personally, I think he’s the prototype of the candidates the NY GOP needs to rebuild around: young, smart, tech savvy, intellectual, heavy on policy, and a product of the private sector instead of a life in New York politics. He’s exactly what we as a party need, and more importantly, what the people of New York need.
And at this point, it’s temping to call him the front runner.
Thanks to John for his support, and please be sure to check out JohnBrodigan.com.
Posted by Team Wilson on 06/16 at 03:12 PM in
(0) Comments •
Permalink
New York--June 16...New York State comptroller candidate Harry J. Wilson (R-C-I) today issued a challenge to unelected state comptroller Thomas P. DiNapoli (D-WFP) on Mr. DiNapoli's plan to allow borrowing from the State Pension Fund to make payments to the very same State Pension Fund, plus approximately $2 billion in interest -- a cost that would be borne by unsuspecting New York taxpayers.
The concept has been widely criticized by Republicans and Democrats alike, and Mr. DiNapoli alternately a) proposed the plan himself, b) opposed the plan, and c) claimed not to be familiar with the plan, even though the Governor issued it on January 14th of this year (link to Governor's news release here).
The curious concept of borrowing from the Pension Plan to pay the Pension Plan was proposed by Mr. DiNapoli in May 2009 in the form of legislation, sponsored at Mr. DiNapoli's request in the State Senate by Senator Diane J. Savino (D-Brooklyn-Staten Island) and in the State Assembly by Assemblyman Peter J. Abbatte (D-Brooklyn). TheSenate and Assembly bills are available here and here, respectively.
"Mr. DiNapoli supported questionable borrowing schemes for 20 years in the State Assembly, but now he seems confused by the definition of the word," Mr. Wilson said. "So I am pleased to offer him a debate opportunity to make his positions on borrowing schemes and other matters pertaining to the office of the state comptroller abundantly clear. This issue is important to the taxpaying public, and I will make myself available to any New York television station graciously willing to host this debate. I ask Mr. DiNapoli to do the same."
Mr. DiNapoli was appointed state comptroller in 2007 by his former colleagues in the State Legislature over the vocal objections of former Governor Eliot Spitzer (D), who called Mr. DiNapoli "thoroughly and totally unqualified" for the job.
Posted by Team Wilson on 06/16 at 10:14 AM in
(1) Comments •
Permalink
An excerpt from today's New York Times piece, titled "Comptroller Backflips on Pension Borrowing"
ALBANY — State Comptroller Thomas P. DiNapoli is trying some political acrobatics as he voices opposition to thetentative deal reached by state leaders last week to borrow billions of dollars from the state pension fund.
“Let me be very clear,” Mr. DiNapoli said in a statement Monday. “The pension fund will not be used to balance the budget.”
Here’s the rub. The plan to allow the state to borrow from its pension fundoriginated with Mr. DiNapoli, who has been pushing it since last year. In fact, his plan would allow an even greater amount of borrowing than the agreed plan, and for an unlimited period of time.
Yet on Monday, he was holding himself up as the defender of the pension fund against the plan, and being hailed by labor unions for doing so.
ALBANY — State Comptroller Thomas P. DiNapoli is trying some political acrobatics as he voices opposition to thetentative deal reached by state leaders last week to borrow billions of dollars from the state pension fund.“Let me be very clear,” Mr. DiNapoli said in a statement Monday. “The pension fund will not be used to balance the budget.”
Here’s the rub. The plan to allow the state to borrow from its pension fundoriginated with Mr. DiNapoli, who has been pushing it since last year. In fact, his plan would allow an even greater amount of borrowing than the agreed plan, and for an unlimited period of time.
Yet on Monday, he was holding himself up as the defender of the pension fund against the plan, and being hailed by labor unions for doing so.
Harry's statement on the scheme to borrow from the pension fund in order to pay into the pension fund:
"Hands off the state pension fund. Borrowing against the fund to make up a shortfall is fiscal madness. It is akin to taking out a home equity loan to make mortgage payments.
"Our unelected State Comptroller's office is now dubiously suggesting that he has not been briefed on the Governor's proposal, yet he proposed a nearly identical plan himself a year ago (DiNapoli news release available hereand Senate and Assembly legislation introduced at Mr. DiNapoli's request available hereandhere, respectively). Mr. DiNapoli needs to make clear his role in this. He has either been cut out of talks on the future of the State Pension Plan, making him irrelevant in his duties as Comptroller, or he is being less than honest about his role in this outrageous proposal.
"It is the fiduciary duty of our state comptroller to protect the pension fund to ensure the financial security of New York's one million public service retirees and employees. Mr. DiNapoli is failing in his responsibilities. Our Comptroller needs to stand up as their protector and say 'not on my watch'. If not, he is failing to fulfill his fiduciary duty."
Cuomo, the Democratic gubernatorial nominee, recently dragged DiNapoli into his pay-to-play pension fund probe. The AG has so far declined to endorse the controller and might take a pass on backing him altogether, according to a source familiar with Cuomo's thinking.
That would be a stunning blow to DiNapoli, who is widely viewed as the Democratic ticket's weakest link. DiNapoli's Republican opponent, former hedge fund manager Harry Wilson, is considered the GOP's best shot at statewide victory in November.
DiNapoli raised eyebrows by not immediately denouncing the borrowing plan, which was first reported Saturday.
Posted by Team Wilson on 06/14 at 11:05 AM in
(1) Comments •
Permalink
Have you ever taken on credit card debt to make a payment -- on the same credit card? That's what New York State is doing, under the careful watch of unelected comptroller Tom DiNapoli. This is how a smaller debt becomes a larger one, with no benefit to anyone, and it's how DiNapoli is handling New York finances -- by kicking the can down the road as our finances teeter on the brink.
From the front page of today's New York Times:
Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.
And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.
As word of the plan spread, some denounced it as a shell game and a blatant effort by state leaders to avoid making difficult decisions, like cutting government spending or reducing pension benefits.
“It’s a classic Albany example of kicking the can down the road,” said Harry Wilson, the Republican candidate for comptroller, who holds an M.B.A. from Harvard.
Read the whole story <link>
Have you ever taken on credit card debt to make a payment - on the same credit card? That's what New York State is doing, under the careful watch of unelected comptroller Tom DiNapoli. This is how a smaller debt becomes a larger one, with no benefit to anyone, and it's how DiNapoli is handling New York finances - by kicking the can down the road as our finances teeter on the brink.
From the front page of today's New York Times:
Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.
And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.
As word of the plan spread, some denounced it as a shell game and a blatant effort by state leaders to avoid making difficult decisions, like cutting government spending or reducing pension benefits.
“It’s a classic Albany example of kicking the can down the road,” said Harry Wilson, the Republican candidate for comptroller, who holds an M.B.A. from Harvard.
Sign up today to volunteer -- we must reclaim the Empire State, as small a gesture as they might seem, each of you who puts a bumper sticker on your car, and every time you make a phone call for Harry, you're helping to reshape the future of New York State for the better.
