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Comptroller Tom DiNapoli on His Bid for Reelection
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New York State Comptroller Tom DiNapoli joined th…
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- [00:00]
A
Foreign. Hello and welcome to MAX politics. This is Ben Max coming to you from New York Law School and its center for New York City and State Law. Thanks for tuning in. It's Monday, June 8, 2026. Today on the show, we're continuing to dig into the New York State Comptroller race, where there are three leading Democrats in the running in the primary being decided this month, incumbent State Comptroller Tom DiNapoli, who is my guest on this episode of the show, and two challengers, Raj Goyle and Drew Warshaw. I spoke with Mr. Warshaw recently and that conversation is up in the MAX politics feed. And Mr. Goyal is booked. So keep an eye out for that interview coming up this week as well, all in advance of the start of early voting on June 13, running through June 21. Primary day is June 23. This is the statewide primary happening this month. The other two statewide offices of governor and attorney general do not have primaries. All eligible Democrats across the state can vote in this primary for state comptroller. And there are, of course, many other primaries on the ballot this month for state legislative and U.S. house of Representatives seats, although in some parts of the state there may not be other races on your ballot. State Comptroller Tom DiNapoli with me in a moment. He's seeking reelection as the state's chief fiscal officer, responsible for oversight of state government and much more, leading an office of roughly 2800 employees that include auditors, financial, business and policy analysts, information technology specialists, contract managers, investigators and others. The responsibilities include investigating waste, fraud and abuse to protect taxpayer money, including by auditing state agencies, authorities and services, including the mta providing oversight of the state budget and reviewing state contracts and payments and managing the state's massive public pension fund, which is worth roughly $300 billion, and ensuring that state employees and retirees get their paychecks or their pension payments and still other responsibilities of this office that does not get quite enough attention. But we're making sure to give this race its proper due here on MAX Politics. The winner of this Democratic primary among dinapoli, Warshaw and Goyal will face Republican controller nominee Joseph Hernandez in the general election. And I'll have him on the show sometime between the primary and the general to make his case and also hopefully talk to the Democratic nominee again at that point. But for now, the question is whether that Democratic nominee will again be Tom DiNapoli or whether one of his upstart challengers here can somehow prevail and erase that is flying under the radar, especially with all these very highly competitive congressional primaries in New York City and beyond, but the candidates have started to spend a good bit of money on ads and mailers and such. DiNapoli has been state comptroller since 2007, when he was appointed to the position by the legislature after the resignation of his predecessor under scandal. He subsequently won state elections in 2010, 2014, 2018 and 2022. He has not faced a serious primary challenge until year and both of his main opponents in the primary say it's time for change and that DiNapoli is not as active and aggressive as he should be. They're laying out their platforms for how they would run the office differently and fulfill its very important role. And DiNapoli is of course pushing back and defending his record and he'll do so in this interview ahead today. It's also to be seen whether Warshaw and or Goyal can actually make this that much of a contest. We won't really know probably until the primary happens. It's not a head to head race. They could split the opposition vote to the incumbent Annapolis. There's also been no public polling on this race at the time. We recorded this interview on June 5th. So as I have the three candidates here on the show, I'll also note that toward the end of May they did engage in a debate on Spectrum News, likely to be their only debate of the primary, and that is available on YouTube if you'd like to watch it. So very briefly, I had my conversation with Tom DiNapoli. If you've missed any recent episodes of the show, they included my conversation with Drew Warshaw, one of his challengers. I also had a great recent conversation on the New York Knicks and the city talking basketball as the New York City game and much more, including a bit of a finals preview between the Knicks and the Spurs. Keys to what will happen on the court. I was joined by Chris Herring, an NBA reporter and author of the excellent book Blood in the garden about the 90s Knicks, as well as Jonathan Fisher, a long time Knicks fan and former Knicks writer himself. Otherwise, a lot of good Recent other episodes in the feed on New York politics, policy and government. Stay tuned for the third in this series with Democratic candidates for state comptroller. That'll be Raj Goyle. Plenty to check out if you missed any after you listen to this one. All right, I'm pleased to welcome back to max politics, New York State Comptroller Tom DiNapoli, a Democrat seeking reelection this year first by running in the primary taking place this month here in June 2026. Primary day is June 23rd. Early voting will start very soon on June 13th. There's mail in voting underway as well. My guest has been in the statewide position of chief fiscal officer since 2007, has won four straight statewide elections, but now is facing spirited primary challenges from two opponents. And we'll get his case for reelection here. Comptroller DiNapoli, thanks for joining me. How are you?
- [05:39]
B
I'm good, Ben. It's nice to be back with you.
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A
Thanks for joining me. So it's primary month. We're speaking here on June 5th. Voters are starting to pay attention. Some people are even voting by mail already. So start us off with your sort of elevator pitch. You get two minutes with someone at a subway stop or a farmer's market. What's your what's your big picture pitch to voters for another term as state comptroller?
- [06:03]
B
I try to remind people that the state comptroller's office may not be the most appreciated office in New York state government, but it's very fundamental to the functioning of our state. I've proven that I've had a steady hand at overseeing the finances of the state. Again, reminding people that I don't set the state budget. That's up to the legislature and the governor, but I'm the one that makes sure that the money gets spent as intended. So with our audits and our reports, we keep a close eye on not just state spending, but state issues, state trends. Certainly for anybody who is a public worker in the state, if you work for New York state or local governments outside of New York City, managing the state pension fund is a big responsibility, and we have the best fund out of all the state big state pension plans in the country. And under my watch, the pension fund has actually doubled in size and we continue to pay out benefits on a reliable and regular basis. And I really try to make the point that this office, particularly because I inherited it at a time when there was scandal and a poor reputation, that we got the office back on track to be credible, to be viewed as an independent and honest broker in talking about the issues facing the state and doing it with a level of independence that I think is a less partisan perspective, which again is, I think, what's intended with the office of state comptroller. And at a time where we're facing so many challenges, be it with the economy or certainly the poor policies that are affecting us coming out of Washington, you want someone with a steady hand and a proven track record to be in this position. So I run on my Record I run on what I've done and my energy and enthusiasm for doing it for another four years.
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A
How would you say through the course of these nearly two decades, you've experienced at least two, really two major, major shocks. The recession in around 2009 and then you had the COVID shock, some ups and downs beyond those, but this long period of volatility, lots of good times in between those two shocks. But how would you sort of describe your influence in that role on ensuring fiscal stability rationality in the state? When you say you have been a steady hand, how does that show itself? How would, how have you been able to influence the state coming through crisis or even being smart about its finances and fiscal picture during good times? What would you point to in terms of your influence on the discussion and the decisions that are made?
- [08:43]
B
I'd point to two areas in terms of a very specific responsibility. I'll bring up again the pension fund. So when I first became comptroller In February of 07, no one saw the global financial crisis coming. So when that hit in the following months, the pension fund went from about 150 billion down to just shy of 110 billion just in one year. That kind of dramatic drop was incredible. So having to have the patience and foresight, working with my team to make sure we could rebuild the fund and understanding that first priority is providing the retirement security for our members, but also understanding the fund has an impact on taxpayers across the state because the pensions are funded primarily through investment return, but also employee contributions and employer contributions. So it has an impact on taxpayers. So the fact that we were able to rebuild the fund as quickly as we were able to, and I think put in place an asset allocation that ensured that when the next wave would hit, which as you point out was Covid, which didn't have as dramatic a hit, but did have a negative hit in the short run on the fund. And still to be able to say from 2007, when I started to where we're sitting now in 2026, that the fund has almost doubled in size. So we're at our valuation as of March 30 of this year. You know, we're, we're over $295 billion fund. And keep in mind we've been paying out benefits at a growing rate. So last year we, we paid out something like $16 billion in benefits. So, so you, you, you accumulate that over the past, you know, 19 years that I've been in this position, it's over $200 billion we've paid out in Retirement benefits. So, so managing the fund, which is a direct responsibility because as you know Ben, New York, unlike most other states, we have a sole fiduciary model. So we don't have a board of trustees. So much responsibility resides with the controller. It doesn't mean I'm the one, you know, doing, doing all the day to day investing. We have a very professional operation but, but I'm ultimately, you know, accountable for it. So I think that's one important area of success and reassurance because you know, global financial crisis, Covid, we don't know what the next one is. Before global financial Crisis it was 9, 11 and the dot com bubble bursting. It seems every 10 years or so we have another one of these crises. So that's why having the plan in the best shape, it really be an all weather investment strategy is very important. It continues to be. I think the other area is our role as far as making recommendations on how the state best prepares itself for those challenging downturns. So again as far as state budget, state finances, same thing for New York City finances. We have a role in terms of offering comment on the state budget when the governor proposes it, when the mayor proposes it. For the city budget. We are not part of the budget making process. But when the budgets are completed we will do our report and analysis and we look at not just the short term budget balance question, but really long term how are we ensuring that there's recurring revenue and recurring spending both for New York City and New York State. And that's where you know, my commentary has been very clear and I'd say certainly for the state level, we've seen some recognition of what we've been urging and that is that New York has not been adequately prepared with reserve funds, rainy day funds as you might call them. Fortunately, where we're at in 2026, where we're at the highest level of reserves that we've had in a number of years. And I credit Governor Hochul and recent legislatures for putting more money into those reserves. That being said, one of my criticisms of this year's budget process is that with all the money that was being spent and it is a record high budget, more was not put into those reserve funds. We're about 15 now. We should have put more money there and more money into the statutory reserve funds is a priority. Not so much in the formal reserves where that could be used for short term budget relief. So the fact that we are in better shape I think is good news. My concern moving forward though Ben, is that we're starting to see the effects in 2026. We're going to be seeing more of it as time goes on of the not the big beautiful, but the big ugly bill from last year from the Trump Republicans, the cuts, particularly in health care. This year we're going to start to see more of that with the SNAP program, what we used to call food stamps, nutrition programs, the education funding and so on. We're seeing a fundamental restructuring in the relationship between the federal government and the state, so maximizing how we are going to be as efficient as possible with state spending. And that's where our audit function comes in. We are take Medicaid, very expensive growing program. We are regularly issuing audits that show that there are ways that we could be smarter about spending money without hurting people, without people being denied services. And we've also stepped up our investigations unit where we find fraud. We found this year a number of cases and more in the pipeline of these bogus Medicaid transportation companies being set up. Millions of dollars. You know, and then we work with DAs or we work with Tish James office or the US Attorney's office to hold people accountable. So, you know, with our audits, we don't have the force of law. When we make recommendations on agencies to be more efficient, we stand behind our recommendations. We have very professional audit team. But I would say, you know, helping the state navigate the changing environment as far as the federal state relationship and recognizing the volatility in our economy, which for now is relatively strong. When you look at the statewide numbers, I think that's been a strength. And the fact that we do have better reserves than we've had, not quite where I'd like them to be, I think showed some recognition by the legislature, the governor that those recommendations were accurate. And we're going to continue to keep a priority on that audit function to make sure our taxpayers are getting the best value for their tax dollars.
- [15:06]
A
And do you feel like the work your audit team does gets the level of results in adopted recommendations or adjustments to the ways that state programs and agencies do things that you'd like to see? Because I think that relates to one of the central sort of things that your opponents are running on in this race is that you're not sort of forceful enough out there publicly in sort of rattling cages and saying, you know, government needs to change and here's how and if your office is doing the work. But it's mostly audits put out on paper, you know, sent out to the press who may or may not pick them up and then back, you know, sort of back channel conversations between your office and the state agencies that may not get the level of pickup that you being out there more really, you know, taking people to task and calling things out and doing more media and things like that might get. How do you. How do you sort of answer some of that criticism and think about whether your work in these regards is getting the pickup that you think it should?
- [16:12]
B
I think audits have to have credibility, and I think the credibility starts with the work of the audit team. If. If the audits are viewed as just opportunities for political grandstanding, that. That undercuts the credibility of the audit. You know, the role of state controller is not to be standing up on a street corner yelling and screaming so that he can get his name in the paper. And that seems to be what my opponents seem to want to be able to do. This is not. This is not the job for the. For the folks with the big ego that want to see their name up in lights. This is the job for the. For the person that says, I have a professional team of auditors who are civil service employees. I don't know whether they're Republicans or Democrats, but the strength of their work is the quality of the work, the integrity of it. And that integrity gets compromised if people view that all we're doing is trying to get on the front page of the local paper. Look, the reality is audits are audits. Unfortunately, as you know, you're very familiar with the press. There is not the kind of press coverage of anything that goes on in state government like there used to be. I mean, there's been a big downsizing of the lca, the Legislative Correspondence association, that years ago, when I was in the legislature, you'd go to the LCA rooms. It was buzzing with reporters. Every city daily had a presence there. And statewide now half the cubicles are empty. Not so much because people working remotely, but just there's not the attention being paid anymore. So there is, I think. Look, we're always frustrated when we have a good audit and we don't seem to get as much pickup. But me standing on a street corridor is not going to change the dynamic in terms of what people want to cover. What I'm more concerned about are the results. And I think, again, the challenge is when you're doing audits, an audit makes recommendations, but an audit does not have the force of law. So many of our audits do result in a real change that's tangible and can be measured. When we do our summary of Literally the hundreds of millions of dollars that we've identified in savings with the Medicaid program, you know, that's tangible now. Do they implement all of our recommendations? They do implement many of them. When we do, you know, qualitative performance kind of audits, we did something, you know, we did an initial audit and then a follow up audit on the issue of maternal health. It'd been a real issue in our state, particularly for black women having very poor numbers compared to white women as far as outcomes with childbirth and, you know, an issue certainly our state is concerned about. And we found that the Department of Health had some advisory recommendations that they were starting to implement, but they needed to do a better job of following up on their own panel's recommendations. And we did a follow up and it showed that, in fact there has been some progress made. The numbers are still not where we want them to be, but we were able to get that agency to change direction. We did a big audit. You know, everybody's talking about housing. One of the issues of housing. Housing is when people have complaints about being discriminated against. When they're trying to rent an apartment or other housing issues, those complaints don't get addressed. We did a big audit on the New York State human rights office and how they were not adequately addressing these issues. In fact, they literally took some of the complaints and put them in a file cabinet that was labeled the Twilight Zone. Well, that resulted in a whole shakeup of that agency, new leadership, and they've turned around. I could go down a whole list of audits where we, we've had an impact. I'm more concerned about the credibility of our work and the impact. It may not be on the front page of the New York Times, but I know our auditors are making a difference. And I think when we do get a good response from a state agency or local government, it's because they know we are trying to make their operations better. We are not there just trying to shame them to take a cheap shot to get a headline in the paper where we do very clearly make a lot of noises when we find people stealing. And, and, and certainly then the press, the press does pick up, you know, those cases, we've had a lot of those. I mentioned the Medicaid, but just we've had so many other cases like that. So, you know, I, I think it's easy to take a cheap shot, but, you know, controllers tend not to be the best known folks out there. That's not unique to my, you know, role. Whether, you know, you, you go back to my friend Carl McCall's days or Ned Regan, you know, or even the city controllers. The city controllers are not as well known as the mayor would be. I mean, that's just the definition of the job is just a different kind of you're not setting policy, you're not making law, you're not indicting people. You know, it's a very different role. And so it's easy to take a shot. I like when they say, oh, I'm not a household. DiNapoli is not a household name. I'm not sure the other two have a household name either. So, you know, that's not the point of being the controller.
- [21:15]
A
So a couple things to follow up on that you said. One is, you know, some of that early time, I mean, you had been in office a few years, but when the Great Recession hit, the state was, had a lot of financial struggles in the years to come. You had Governor Andrew Cuomo come in and he was really facing, you know, challenging picture in terms of state budget and then broader state government function and all sorts of issues. But, you know, there was a real atmosphere around that time, again born out of necessity. But even beyond that around Medicaid reform, around questioning the effectiveness and efficiency in state spending, there was pension reform, some of which is just getting somewhat undone here in this latest state budget deal where, you know, there's a view that the state is on, you know, much stronger fiscal footing and localities are as well, and that, you know, some of those reforms could be undone. I don't know if you view that all favorably and you can tell us what you think of the changes to the so called tier 6 pension system. But there was this atmosphere back then, you know, about a dozen or so years ago that there was a lot of questioning again born out of some real necessity about really reevaluating some of these programs. Even education spending is the effectiveness of all this money that's going to localities really working out in terms of student outcomes, good or bad. Governor Cuomo was, you know, pursuing a lot of education reforms. There were huge battles over those as of course you remember, and you know, had a voice in related to teacher evaluations and charter schools and all these things. But it seems like there's, there's a lot less of an atmosphere around that and the questions of sort of major reforms to programs or really looking at effectiveness and efficiency largely because the money has been rolling in. I think, you know, that, that we've, that there hasn't been that type of atmosphere would you agree with that? Do you think it's. It's time going into the future for a little bit of a reinvigoration of that? Do you think it's. It's happening consistently, but not in just such a wave making way. How do you sort of think about the general atmosphere in state government? Because you do get various, you know, fiscal watchdogs and outside groups who say, boy, when it comes to Medicaid spending, education spending, overall state spending, you know, there's a lot of questions about effectiveness and efficiency.
- [23:44]
B
Still, I think it's an interesting question. I guess I would, I would respond this way, that, you know, in terms of the, the overall point about making government more efficient, that that's kind of the bread and butter of what the comptroller's office does in terms of some of the bigger issues, maybe philosophical, if you want to call it that, in terms of restructuring of government. Some of our reports from our office touch on some of those areas. But I would say a couple things. I think, first of all, in recent years, the focus has been much more on the impact of the federal policy changes and really trying to have New York State defend itself not just in terms of dollars and cents, but just in terms of a bad policy direction. So I think more of the focus of what you're laying out has been for New York to respond to these terrible federal policies. Take the environment as an example. New York made very clear, starting under Governor Cuomo and continuing with Governor Hochul, that we have very strong commitments to having very clear climate goals and understand that climate change is a risk financially and in every way. And yet we've seen a federal administration that is undoing commitments made and really undercutting our ability to be part of that transition, canceling the wind projects and taking away the incentives for EVs and renewables. And it's very clear. And by the way, our audit started this whole conversation about not meeting New York's climate law goals. The PSC was charged with coming up with the planning to meet those goals, the CLCPA goals, and we had an audit. And that audit was about to come out, and it said the PSC has not been doing any planning for us to meet those goals. And then the PSC acknowledged it right before the audit got published. But that's an example of how our work really is what triggered that consideration. Now, some of my friends in the environmental community aren't happy that, you know, the governor, as part of this process this year, has, you know, changed the time frame and changed some of the adhering to that, to that, those requirements. But, but that's a reality that we had to face because of these changes coming out of Washington. And I think at the state level too, if you go back to the years that you were talking about, you also had a divided legislature in New York. New York has evolved. This is a reflection of what's happening nationally. We are becoming one party states, we're not becoming two party states anymore. So some of the friction that would create some of the debate out there on some of these issues, I mean, when I was in the legislature and when the Governor Cuomo started, Republicans had the Senate, Democrats had, the assembly had to have debate, had to come together at times. Now Democrats have, you know, pretty much super majorities, both houses and Democrats being Democrats, debating among themselves. But, but not necessarily, you know, in a way that, that elevates some of the kind of more philosophical, you know, questions that, you know, that you're talking about. So, yeah, look, I think there are still many, many advocacy groups that, that are regularly, you know, recommending certain changes in structured government. You know, you touched on Medicaid. It's been an elusive target. We always have a Medicaid cap and then the legislature and the governor always manage to set aside the requirements of the cap that's there because again, healthcare is such a growing expense area. We see that nationally, just not in New York. But again, that's why I think our work to try to be as efficient as possible is key. You mentioned the pension reform. What I said from the beginning, the fact that we keep the plan well funded. Right. It's not just that we're so large, it's that we, you know, we're over 95% funded, which for most public pension plans, we're the envy of other states. We could have a conversation about benefit enhancement because we have about two thirds of our workforce now in our plan. And I think it's true for the city as well, our tier 5 and tier 6 members. And they're saying, you know, our benefits are a lot less than the people who we're working alongside of and there are issues of recruitment and retention. So I think it was certainly was appropriate to have that conversation. And the final changes on Tier six were a compromise. The unions had a much more ambitious agenda, much more expensive agenda. The governor was willing to entertain changes but needed to have it at a price tag that she felt that the systems could afford. So I think actually we ended up in a good place on that one.
- [28:36]
A
You feel good about that compromise?
- [28:37]
B
Yeah. Look, I mean it's easy for me to say because I'm sitting on a plan, you know, that's well funded and we just had a, you know, close to a 12% return when our long term goal is 5.9. So it's almost double, you know, what our expected return is. So, so, you know, I don't have the final numbers yet. We are actuary still has to work because we have to look at the tier 6 changes. We have to look at, we have the investment return but we have to look at other issues like what's been happening as far as salary levels, what's happening as far as, you know, mortality rates and so on. So I don't know the impact on the contribution rate, but my guess is at this point, while there may be upward pressure on the rate, it's not going to be anything dramatic for our system. So. Yeah, so I think in the ended up, it ended up in a good place.
- [29:21]
A
So. So you, you say that now and I believe during the budget process you, you advocated some for some adjustment to tier six, correct? I mean you were, you lent.
- [29:32]
B
Look, I, I said, I said it's, I see it at my own agency we've had recruitment, pension issues. It's, it's. And because we're well funded, we can have that conversation. It was, our role is to do the fiscal note, you know, what the cost is. So I didn't say do do this plan, this proposal versus that proposal. Again, not my place. But we did provide the fiscal notes of the legislature. The governor know exactly what they were voting on.
- [29:58]
A
And so, but you, but you acknowledge that in the process that you thought it was worth taking another look, which again means some changes. Right. So I get that. And now you're, you know, you're fairly pleased generally with the compromise. I saw your initial statement on the budget outcome. Obviously your office is going to do a much deeper dive. But you, you know, expressed approval of some of the deal in the state budget around some of the, you know, cost of living measures that were agreed upon, aid to New York City and upstate areas that needed some budget help, localities, some of the, you know, decisions that were made around immigration protection. So to connect that to, you know, a prior question, why not weigh in more during the process to say, you know, here's my analysis based on my office's analysis of why some of these changes would be good and some of these changes would be less helpful to the state or detrimental to the state. And again, not necessarily trying to get on the front page of the times, but using your office's sort of weight and gravitas to sort of help guide the process more, why isn't that a prudent way for the comptroller to. To weigh in?
- [31:14]
B
Well, I mean, I think. I think it gets back to what the role is. You know, I don't view my role as being a legislator. I don't view my role as being a governor. Right. I did the legislature for, you know, for 20 years. I had an opinion on everything because I had to. Everything. You know, I respect. I respect the separation of powers and the separation of responsibilities. I am not. Look, I obviously have opinions. Right. And I have positions. And I'm always pleased when legislators will use some of our audit findings or our reports to say, hey, we need to do something more in this part of the budget. You know, take. Take food insecurity. We've done a lot of reports on that issue, and I'm always very pleased. Both in New York City and New York State, in budget deliberations, legislators that advocate for more money for. For food programs point to the controllers reports. I could go down.
- [32:08]
A
You know, would you say the way that most New York City comptrollers do their job is incorrect? I mean, it seems like most of the people who've held the role of city comptroller since I've been doing this work and covering politics and government in New York have taken a very different approach than how you take your job.
- [32:25]
B
I'm not sure I would agree with that.
- [32:27]
A
No. Okay.
- [32:28]
B
No, I don't think so. And. And, yeah, and with all due respect to my city controllers, who I love dearly, they all tend to be running for mayor as soon as they're controlled. I. I've never. I've never been. I've never been running for governor. You know, I mean, let's be honest. There's a. There's a bit of politics involved, and that's not a bad thing. I'm not. But. But look, that's. That's. That's. That's. That's. I mean, I'm just trying to think, right. I started. I started as controller with Bill Thompson, then it was with John Liu, and then with Scott Stringer and that with Brad Lander and in every case, Ben, what were they doing shortly after they became controller? They were all running from there.
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A
They were certainly planning it. Yes.
- [33:12]
B
And so I think. I think. I'm not saying in a disrespectful way, but I do think that that's part of the calculation. I would say Respectfully, is a little different than my approach. I am very, I've been very privileged to be the control of the state of New York and I want my work to stand on its own and not have people say, oh, that's great, he's terrific. He would be great to be the governor. And not that people said that, by the way, but that's not the purpose of when I take a position or I do a report. And I think that's what's given me more credibility. I think that's why I have won four elections statewide, because there has been a level of TR and integrity and even in terms of colleagues understand that I am not taking positions that are either, you know, that are not. That are beyond what my appropriate lane is because I think if I start to do that, it diminishes the credibility and the integrity of the work. When we do a report suggests policy changes, I want people to say, you know what, that's a good idea. Not because, you know, Tom Dinapoli is positioning himself for something else other than
- [34:17]
A
what you said about not adding more to reserves, other, other aspects of the state budget deal that just came together that you're most concerned about, are you?
- [34:27]
B
Yes. Yeah. I mean, look, the next step really is getting the updated financial plan. So we're waiting for that for the division of budget, the governor's proposal. You know, in our initial analysis, we flagged this after the 30 day amendments. It was about $27.9 billion in out your budget gaps. I haven't seen the updated numbers, but what I cautioned all through the process is besides making decisions to balance the budget for the coming year, which because we've had revenue coming in higher than projected consistently over the past year, we have the benefit of Wall street doing well and tax revenue being strong. It should not just be about balancing the coming year's budget. It should be about making spending decisions in 2026, 2027 that will get us closer to aligning recurring revenue with recurring spending. And that's been very elusive for New York, probably, except during the years as the COVID relief money was coming in.
- [35:23]
A
Speaking of election considerations, that's a tough one to ask in a gubernatorial election year in a state legislature.
- [35:31]
B
That is a very appropriate observation. But my real concern will be that question. When we get the updated from financial plan, my hunch is that those gaps will probably be larger. And my concern is that unless there is a change in direction in Washington and we raise the issues about the harm that Washington policies are having on us, you Know, we're going to really see a greater impact of the cuts in Medicaid. You know, the folks losing their coverage. With the Essential Plan, we're going to try to have more of them covered at basic Medicaid, and some of them may be able to get health care on the marketplace, but you're gonna see some people fall through the cracks, which doesn't mean they won't get healthcare, but it means they'll show up at the hospital emergency room as their doctor's office when they're sicker and it's gonna be more expensive and the charity pools have to pay for it anyway. So you're gonna start to see an increasing drain on the state from those federal policies, not just in healthcare, but the other areas I touched on. And if our economy does not hold up, if Wall street doesn't have another strong year, you could be seeing some tough choices on, on, on programs and spending next year.
- [36:38]
A
Mm. Yeah. I mean, it seems again like that's true at the state level. And then the way that the state was helping New York City balance its budget was also a very sort of get through this budget and then we'll kind of take another, take another look at it once we get through again. First year of a new mayor, it's very hard to come in with your new team and your priorities and deal with a budget deficit and also do more long term planning. So, you know, there's a rationale to sort of getting through this first budget for Mayor Mamdani and his team, but the city is also facing some real questions about its.
- [37:09]
B
Yeah, you're right. And I do think that, look, I think the mayor was, was very forthright in terms of, you know, laying out the worst case scenario, the numbers. And because I think too often in the past, the city, you know, was too optimistic with some of the, some of the projections that they had. I think that, you know, it was smart for him to handle it that way in the beginning. But, you know, it was very clear that, you know, the threat of a 9.5% property tax increase was very concerning to members of the city Council, a lot of other folks. So, you know, combination of, you know, some RE estimates and some savings at the city level and obviously some changes as part of the state budget process that will help the city get through this year's budget, as you appropriately lay out, gets the city through the mayor's first year budget. But you could have some tougher choices next year, especially if the economy stays volatile. Which is why our monitoring role as you know, we have an office within the office of State Controller that just looks at city finances. We are part of the financial control board that does still exist. People don't realize that, but as you know, you covered it. It's not a hard supervisory board, but it's there. Should. Should the city go off the rails? The legacy of the 75, you know, fiscal crisis. So, so that's a very important look. New York City is so essential to the economic engine of the state of New York. That's why we spend a lot of time looking at what's happening in New York City and why that's an important charge. We do that parallel to what the city controller does, but we have our own independent role in that regard as well. So, look, I think a lot of it is tied to the macro issue of the national economy, the geopolitical challenges that we're facing. The impact of inflation and price of oil with the Iran war. I mean, you go down the long list. But I do worry. You know, we talked earlier. You know, you mentioned the global financial crisis. You mentioned Covid. I mentioned 911 and dotcom bubble bursting. Every few years, we're due for something that we don't expect that's going to put us in a tailspin. We're getting a little too overconfident on the stock market being so strong. And we have to recognize, so, you know, a handful of corporations that are driving so much of that. So, you know, if there's a left turn or a right turn, depending on your perspective, wrong direction, it's certainly going to, you know, hurt New York and hurt our finances. You know, we get people like to criticize Wall street and certainly there are excesses that I'm critical of as well, but that securities industry accounts for close to 20% of the revenues that help fund all the state programs. So we, we want to keep those jobs in New York. We want them to be profitable, we want them to be responsible, but we also want to be, you know, productive and profitable so that we could tax and have the benefit of that revenue. So.
- [39:56]
A
And is it fair to say, generally your position, you know, the speaking of the mayor and the governor and the budget processes at the state and city level, a lot of questions around tax rates and increases, and the governor basically saying right from the start, nope, we're not doing personal income tax increases and pretty opposed to the corporate tax increases the mayor wanted. And, you know, they settled on a pieta terra tax and a lot of other state help with the city's budget picture. Clearly, that discussion is not going away. The mayor is probably, you know, being somewhat gentle on it because of the election year and that the governor was giving a lot of help with the legislature to the city, but that conversation is not going anywhere. The mayor wants to fund more childcare. He wants to fund free buses and other things. Is it your general view, though? You know, you've struck a cautious tone on this, like. Like on many fiscal issues, but is it your general view that but for a real emergency, New York State's tax levels on corporations and personal incomes are pretty high and shouldn't really be raised unless there's a real emergency? And even some of the things we're talking about here, without your budget gaps and challenges around certain spending, that those are not really reasons to look at those tax rates.
- [41:08]
B
I don't know that I would say it that way. I would say. I would say that my, you know, so like, in the whole, you know, sloganing of tax the rich, for instance, when people say that, you know, ask me what I think. So you know what, I want the budget to be balanced not just today. I want to be balanced tomorrow and the year after that as well. The. The role of the governor, legislature, or, you know, the man of the city council is to set the policy priorities on what they think the state needs or the city needs to, you know, to. To address the, you know, the. Every. The needs of everyday New Yorkers. Once they know what they want their programs to be, they have to come up with the revenue for it. So from my point of view, if the decision is they need to spend a lot more on education or childcare or free buses or whatever, I mean, it's all well and good, but where's the money coming from? So can we be more efficient with the money that we're spending already? My answer on that would be yes, that's what we find regularly on our audits. But that if you still feel you need to add to the budget, you have to make sure the revenue is there. And if the revenue is not coming from Washington and if your tax revenue is becoming soft, does it make sense to raise taxes? It may or it may not, but that's what you've got to decide, legislator or governor. My responsibility is to say, make sure that budget is balanced. Do we have an issue of people leaving New York State because of taxation? Yes. Is it a stampede out of New York State? No. In fact, there are probably more people leaving because they can't afford to live here. Not so much because the taxes, but the General cost of housing and the cost of living. So, so these are all complicated issues. And I think sometimes to just, to just, you know, devolve them into slogans, you know, contrary. People think rich people are already paying taxes. And, and, and many of them are paying, you know, on a percentage basis, you know, in terms of the revenue coming to the state on personal income tax, which we're very reliant on, you know, the top 1 or 2% are certainly carrying, you know, the biggest part of that tax revenue. So you do have to be concerned about what the appropriate level is. But at the end of the day, these are all the big issues that people elect legislators and governors to make their choices and make their decisions. I'm going to be the one to say all well and good folks how you're paying for it. Because the other challenge we have in New York, and I tend to be the only one that points this out, is that people tend to not like to cut programs. People tend not like to raise taxes. So the default too often in New York has been, well, let's just borrow more money, you know, to solve the issue, putting off a hard choice. And that's why New York is one of the most indebted states in the nation. And that's why we put out proposals for debt reform. And you talk about an issue that doesn't get on the front page or even that. Ben Max does not raise thoughtful questions. You talk to people about debt reform and size glaze over. But this is part of the complexity of managing a very sophisticated budget and economy like New York's that we tend to. This is the one thing I will say, Ben, the difference of being in the legislature versus being comptroller. When you're in the legislature and this is what the role is, you're elected to represent your community, to fight as hard as you can for the resources for your district and as part of the budget process. And you go to Albany and you find everybody else is doing the same thing. And this is why the budgets tend to grow. Because to make everybody happy to support the budget, in the end, you got to do something for everybody. And what is lacking with that more short term vision is that people tend to make decisions to get through the budget for the coming year or if it's an election year, which for legislators, every two years, it's consideration of a looming election. What happens with that more short term thinking is that we don't always accumulate up the impact of some of these choices. And what I try to do as comptrollers to say, hey folks, this is, when you add it all up, this is where we're headed. And we need to be concerned about how you're going to have a sustainable level of spending and support for these programs, as important as they are backstopping the federal cuts. This was part of the debate in Albany this year is not easy when you're talking about billions of dollars in cuts. And that's why some people feel they could have done more with the spending increases, more of it directed to some of those maybe losing health care. Because instead what they did is they propped up some of the health care institutions, I guess, on the theory that some of the folks that had health insurance coverage, they'll show up there. So you, you don't want to have the finances, especially the safety net hospitals be thrown out more out of whack than they are already. So these are, these are big issues that really don't necessarily trickle down to the conversation that New Yorkers are having on the street. But that's why I really try in this role to understand that this is the one office that is supposed to look more long term and more broad, not short term.
- [46:16]
A
And this, and, and what we're just talking about there also gets back to the efficiency discussion.
- [46:21]
B
Yep.
- [46:21]
A
Earlier. Right. Which, which you just referenced again. And you hear people, you know, you hear wealthy New Yorkers and corporate leaders say, you know, I pay a lot of taxes, I'd be willing to pay a little bit more. But first show me a well oiled machine that's spending the money effectively. And of course, again, one of the first things they often point to is education spending, which is always the biggest part of the New York City budget. It's one of the top two, you know, school aid is one of the top two portions of the state budget. And questions around, again, student, you know, student outcomes related to the amount of money being spent on education is like the number one thing often pointed to. And this question of, okay, you might want to fund some new programs, but are you also, you know, using the money you have as, as efficiently and effectively as possible?
- [47:08]
B
Yeah. No. And maybe more complicated. Still coming out of COVID the issue of learning loss.
- [47:13]
A
Yeah. I mean, there's immense education, a lot of issues there.
- [47:16]
B
We've done some analysis on that and reports on it. No. And then obviously we have a whole state education department and board of regents that's particularly charged with looking at these issues. And look, we do audits of school districts all the time. I mean, you remember back in the day The Roslyn School District scandal when the superintendent, you know, stole millions of dollars. That was my assembly district. So, so coming into the comptroller job, I've said to our auditors, you've got to continue to audit school districts across the state. Part of why that happened is that the controller's office had moved away from doing audits of school districts, largely because the feeling was, well, you got school boards, you already have some level of independent oversight. And it turns out that that was not adequate. So that, that is a, that has been a priority area for us. Again, it doesn't get into, we know we're not evaluating, you know, what teachers are doing. That's not what our audits do. But we definitely looking at school spending and trying to recommend ways in which our school districts can be more efficient and responsible. One of our priority areas.
- [48:19]
A
Speaking of the state budget in the city, again, the biggest way that the state aided the city was this permission around the city pension payment smoothing plan. It's going to save the city billions in the short term, but cost the city more billions in the medium term. Do you feel like, comfortable about that as a fiscal decision for the city and the state to allow it? Obviously, the, the pension boards in the city are going to also have to decide on this. But you feel comfortable with that as a fiscal decision that the city's then just going to have to say, we wanted to get through, you know, again, like I said, want to get through this budget and maybe the next one, and we'll deal with that a little bit further down the road. It's not that much money, but it is, you know, it is going to be more challenge to deal with in the medium term. You, you generally feel okay with that?
- [49:10]
B
Look, I think, I think, you know, it's not preferable, but again, respecting roles, you know, I respect the city controller and the mayor, you know, working with, with the unions in the city. Then those are the folks who will be, you know, have the appointments to the pension boards. And I assume they wouldn't have done this if they didn't think the pension boards had already signaled that they, that they think it's appropriate. You know, that's their call. We have an amortization program that we put in place at the state level after the global fiscal crisis. And it's still on paper. Right? We still have some of our, it's done differently. It's done at the discretion of, of the local government or the, or the state. And we still have some of our local governments that are, that are doing, and it's another version of smoothing that are participating in that. So, you know, it's, it's not a, it's not a, a novel or, you know, a brand new idea. It's, it doesn't mean it's preferable. But, you know, look, the city was balancing a lot of issues, and I think especially in the context of, of trying to, you know, to get some of that benefit enhancement on Tier 6, I think this was all part of the, you know, the overall, you know, the overall consideration. So.
- [50:23]
A
Right.
- [50:24]
B
You know, you know, again, I, on that one, I would defer to the folks in the city who are responsible in charge with that for whether or not that was, you know, it was, it was their call, not my call.
- [50:37]
A
I want to ask you a couple more pension management questions, but first, let me just zoom out for a minute on this race and I won't keep you too much longer. But this is, this is the first real competitive primer you've had in quite some time. How, you know, how are you feeling about it? Do you feel like a strong favorite? Do you feel like you've really got to get out there and work the Democratic voters of the state in a way you haven't had to before? You know, how are you sort of feeling about the race as you got at, you know, the polling? We don't, the polling doesn't show us much, and we haven't really had polling on this race. It shows us a little bit that you're, you know, not that well known, as you said, you know, that controllers often are flying, flying under the radar. And that's true. So, you know, how are you sort of feeling about this race and needing to win a Democratic primary here? And, and do you consider yourself a strong favorite based on your track record, or you kind of feel like this is a jump ball? How you feeling about this race?
- [51:35]
B
Well, I'll give you a more complete answer on June 24, but, yeah, no, hey, look, I mean, the most important thing is that I'm glad I'm running again. I love, I love the work. I'm very committed to it. I work with a very dedicated team of professionals. I, you know, if you saw the New York One debate, I took great umbrage. I don't mind if they criticize me, but when they start criticizing the entire office, they're criticizing, you know, close to 3,000 very dedicated professionals that I'm honored to work with and whose work I stand behind. I do think I'm the favorite in the sense that I have a strong record that I can run on. And what's been fun about this process has given me a chance to be out there again in a more, you know, political context.
- [52:20]
A
Right.
- [52:20]
B
I mean, people know me for returning unclaimed funds and announcing an audit or, you know, now it's a little bit of a different role, but it's been one to be more forcefully reminding people about the work that we do and, and my record reminding them how I started with an office that was mired in scandal, and we've turned that around. You know, my longevity, I always say, is not attributed to my good looks or anything like that, but the fact that we, we run a clean shop. My opponents make fun of the fact that, you know, that I say I've been in office, you know, with a clean record, but, you know, no wonder so many New Yorkers have been disenchanted in my tenure. I got here because the controller had to resign, two governors had to resign, attorney general had to resign, lieutenant governors had to resign, leaders in the legislature to resign, some of whom went to prison. I mean, I, I, I think the fact that I've run a, a clean shop, especially for the person overlooking the money, that that's a very important item to remind people of because people forget some of the scandals that have typified the other offices. So, look, you know, you'd never know. And I've been around long enough to know. A primary is not predictable at all. You don't know who's going to vote. You have all these other primaries, especially in the city, that are getting a lot more attention than the comptroller primary, and I'm the only statewide primary, and there are parts of the state that this is the only reason to go out and vote. If you live in a neighborhood where there's no other primary, I hope you are fully motivated to come out and vote for Tom Dapoli. But I have no idea what the turnout is going to be. So we're not taking anything for granted. I'm very honored that you look at the. I know you follow it. Virtually every labor union has endorsed my candidacy. Almost all the Democratic clubs in the city have endorsed me. Obviously, my running mates, you know, the governor and Tish James have endorsed me. Almost all the elected officials that have weighed in one way or the other have endorsed me. You know, endorsements in themselves don't mean anything, but if I'm looking for some validation that the people that are looking closely, if they have an opinion, it's a good validation. And you look at some of the groups that aren't elected officials or political clubs. League of Conservation Voters, Planned Parenthood, Citizen Union rated me as the preferred candidate. You go down those lists. We obviously, for those people who are paying attention to the work that I've done as comptroller and for many people who've watched me in action before that in the state legislature, they know who I am and what I'm about and they've been very supportive. So I think we go into it with a tremendous amount of support. But you know, look, it is a, it is a very unsettled environment. And generally speaking, you know, incumbents, I think are faring a little more, you know, challenging wins these days than other years.
- [55:12]
A
So that was exactly going to be my next question. What do you make of some of the atmosphere that is a bit of an anti incumbent atmosphere. There's also, there is a lot of talk in this race and others about, you know, generational change. You've been around a long time, you know, and in this office a long time, you don't seem to, you know, a lot of that question often is coming around, you know, people who are older in office and clearly showing signs of decline. And I don't think anybody is seeing that in you. But, but you know, generational change, questions about, okay, who's the next wave of leadership, you know, turning things over to another generation of leaders. So there's that combination of sort of anti incumbency angst and this question of generational change. How are you combating those forces or thinking about them?
- [55:58]
B
I would answer that in two ways. First, we said at the outset, especially in this job, because this is not a policy job in the same way a legislator or the governor is. This is helping to oversee the finances. So stability, steady hand, credibility, track record, I think means a lot for comptroller as opposed to some of the other positions that people may be running for, for Congress or state legislature, number one. And I think that's. That then becomes a strength for me, not a disadvantage to, you know, being in office. I think also I think New York voters are a little more sophisticated and change for change sake is not necessarily something that people buy into. They want to see what the record is. They want to see who the people are, they want to see what people are saying. And I do think, and I'll say this as nicely as I can, neither of my opponents have really made the case and I think they've come off as kind of screechy and dramatic accusations about my poor record. And also the nonsense, I don't think they've come off as credible. I think in one case you have somebody running like he's to the left of everybody and he's basically was a conservative in Kansas when you look at his record. And the other guy has no particular track record and just is kind of making stuff up along the way. And I don't think they've had credibility. And yeah, they're both maybe a bit younger than me, but I don't think they actually come off as the next generation. I think they come off as kind of self promoting, you know, whiny kind of characters. I mean, I call them jokers during the debate because you listen to what they're saying and it's like they're all over the place. They make up numbers, they make up things. And you know what? You know, we didn't talk about the very beginning, right. People forget that I ran for board of education when I was a senior in high school. I very child of the late 60s, early 70s and knocking on doors and when I had long hair and I was skinny, a little different than now. And I always had that idealism about making change through the political system, through electoral politics. There is so much about Tom DiNapoli that is. Is as much that idealistic 18 year old, you know, coming out of the fights against the Vietnam War and civil rights and everything else that was happening as I was in high school. I am not, I am not whatever my chronological age is. I am still very much that teenager just trying to contribute and make a difference in whatever way that I can. And I don't want to say this in a bragging way, but I think people see that in me. You know, I don't think people certainly agree with everything I've done or every position I've taken, but I think people get that I'm not just doing this because I got nothing better to do. I'm doing it because I have a passion for public service. And I feel very privileged. You would have never if you had asked me years ago. I'll end up. You can have a state controller. I would never predicted that, Ben, but I ended up in this incredible office being one of the statewide elected officials, working with a dedicated group of professionals. This to me is a privilege. It's a great opportunity. That's why people say, well, you should have run for something else along the way. No, this is a great position. I'm very happy doing this. And I do feel I have the energy and the good health to do it. You know, for another four years.
- [59:19]
A
Would this be your final term if you went?
- [59:21]
B
I would. So here's an interesting point because I'm. Even if I get, I will say even, let's say when I get elected again and serve four years, I will not be the longest serving state comptroller. I know Arthur Levitt. Arthur Levitt will still hold the record. I've always said, I've always said the following. Whenever, whether we're running for the legislature or, you know, or now for controller. I'm only talking about the next four years. I hope I have the chance. Four years. I, I'm not going to say one way or the other. You know, you.
- [59:53]
A
Yeah, okay, you mentioned all the labor support clubs, etc. Why weren't you able to win the Working Families Party endorsement? What's, what's your, what do you make of that? I mean, that gets at some of what we're talking about here. Maybe it's some of the, you know, more progressive positions you haven't been willing to take on taxes or, you know, some of those other things or, you know, some of this question about incumbency and generational change. But what's, what's your view about why, you know, an organization that's been an ally of yours that isn't backing you here in this primary?
- [60:26]
B
Well, I would say this, first of all, especially given the rhetoric coming out of my opponents. I actually thought it was a victory that they chose not to endorse in the race. I think it shows that the other two really didn't make the case. I think that, I think, look, the Working Families Party is going through its own identity crisis, frankly, if I could put it that way. It's not the Working Families Party that I helped support when it was beginning,
- [60:51]
A
you know, which was much more labor heavy.
- [60:54]
B
It was very late. We really was representing working people with a very strong labor presence. And it's a bit different now. And I think you're seeing in, in a number of races where they've chosen not to get involved one way or the other. Look, I think what, what will happen after the primaries, they still have to make a judgment on, on governor as well. I'm, you know, my, well, after the
- [61:20]
A
primaries, they'll back the Democratic ticket, you
- [61:22]
B
know, but, but that's what's key about the Working Families Party is organizing and enthusiasm, you know. And so I think, I think that, I think they've got to figure out how they fit in this niche now with, with, with the politics as it is today. And I would hope, because I Do think the Working Families Party has always played an important role and I want it to continue to. But I do hope it gets a little more back to its roots in terms of being more inclusive that, that it gets back to a partnership with labor, I think would be very, very important or a clear partnership. I don't want to make it sounds of a partnership, but not, it's, you know, you, you remember how it was years ago, you know, so well, you know, we'll see. Look, I would have preferred to have had their support, no question about it. But on the other hand, they didn't, they didn't support the, either of the other two either. So I, I obviously I had some significant support within Working Families and, and, and those organizations, be it labor, some of the community groups that were backing me there, they're continuing to back me. So I think Working Families just said, you know, we're going to sit on the sidelines and we'll see what happens. So it wasn't the worst outcome.
- [62:30]
A
Okay, let me just spend our last couple minutes here. Coming back to the pension funds. I know we talked about this quite a bit. It is such a central piece of the job, but it is one area where your opponents are talking a lot about the pension fund. So let me ask you one, one question on the pension fund, which is the divestment question. So there's a lot of talk in this race if you know, you're one of one or the other of your opponents were to win this primary. And then when the general, they're talking about steps they take to divest from fossil fuel holdings from, you know, companies that the government contracts related to ice, immigration enforcement, other things. How do you think about the benchmarks and the line and the process around where to take some of those more activist type approaches to investment? I know you've really taken a, you know, sort of a careful approach to a lot of calls to divest fully from fossil fuel holdings. But I don't think, you know, it hasn't come up in a lot of other ways seemingly until this race. So how do you think about sort of the process and what the line and the bar should be for, for taking on those questions of divesting for some combination of fiscal and social reasons?
- [63:46]
B
You know, it's interesting, when I, when I started S Control, I remember one of the criticisms during the process is that, you know, I don't have an investment background. And then shortly at a bigger controller, I realized more people were telling me what we should divest from rather than what we should invest in. And, and, and that continues to be the case. Look, the. The bar has to be very simple. What's in the best interest of the members of the plan. It's not our money. It's money that's in trust for public workers who expect to retire at some point with a secure pension. We have a constitutional guarantee for those pensions, as do other states have legal protections. But if you don't have the money there, that guarantee means nothing. So our priority always is, how are we, a large investor, close to $300 billion right now. How are we responsibly investing the money to make sure that we're securing the pension? So it means we have a very elaborate process. First of all, with our asset allocation, we believe strongly in diversity in terms of how we invest our money, not putting it all in the stock market. When the stock market's doing very well, people say, how come you don't have more money in the stock market? And when the stock market goes down, people say, well, how come you put so much money at risk in the stock market? We're not day traders. So we have every five years a detailed analysis of asset allocation. And while the biggest part of the portfolio is certainly in public equities and fixed income, we do have private markets and real estate, private equity, credit infrastructure, and so on. With our holdings in the public equity space, much of what we have there, not 100%, but the lion's share of it is in index funds. Russell Products, kind of the vanilla index funds that many people have in their personal investments as well. And the index funds are broadly invested across the economy. There's always that debate between passive investing versus active investing. Our preference is the passive investing. Why? Because we pay very low fees. We don't, as other pension funds, do it differently. We don't give our public equity money for others to do the indexes. We instead manage the indexes in house. We have very low fees. So where we do spend money on fees, it's for the private markets, for the real estate and the private. That's why I laugh when one of the opponents, oh, you're paying all this money in fees? Well, no, we're actually not paying a lot of money in fees. We have a $300 billion fund I'm rounding up. We pay about a billion dollars a year. That is very comparable to peers. In fact, we're kind of in the mid range of large pension funds in terms of fees. And the independent, not the political, the independent evaluation of our funds by the Department of Financial Services and the fiduciary review have said our fees are not excessive, that we do spend a lot of time, you know, managing those fees. So when you are putting so much of your investment in those index funds, you are almost by definition going to be invested in everything that's a public market. Right. A public stock. So you do have cases of stocks that may not be the companies that you love or may have issues. You mentioned climate. Right. And fossil fuels. We took a little different position than New York City. Although I have to point out, people say, well, New York City divested. New York City has not divested all their fossil fuel. They've divested more than we have. But we set up, as you recall, Governor Cuomo was the governor. We set up a decarbonization advisory panel to deal with the climate issue. That panel made a number of recommendations. It did not recommend wholesale divestment of fossil fuels. What it says that we should take a holistic view of our portfolio to see how we're dealing with the issue of climate. And so coming out of that, we came up with actually the first in the country, a climate action plan, which we continue to be implementing, which says we want to transition our portfolio to net zero carbon by 2040, that we will look particularly at the energy companies and set minimum standard, minimum standards. Not a seal of approval, but minimum standards. And in some cases, if we feel it's appropriate, we will restrict and. Or divest. So we've done restrictions and divestments from about 50 fossil fuel and energy companies, coal, shale, oil, gas, and so on. So we have done some divestment where we don't feel it harms our returns for the fund. So as an example, Exxon fell short on minimum standards. And so we divested our active holdings in Exxon because we did have some active management there. But because Exxon was a big enough stake in our, in the index funds, we felt after financial analysis, if we divested Exxon completely, it would throw off the value of the index. And because the index has served us well, that passive investment strategy, we didn't think it was. We didn't think it was appropriate. So the challenge is, when it's a public company and this is part of our climate action plan, we always take a preference of staying invested for the long haul. And then where we think there are shortcomings, do active engagement, shareholder resolutions, voting for against, boards of directors, doing derivative suits, where that's appropriate. So we've had very active engagements. You know, we're talking about climate. People have raised the Issue of some of the companies that have contracts, you know, with the government. As far as ice, we've raised concerns with a number of companies as to what, what's happening with those contracts. What are the risks involved? Are they reevaluating the human rights impact? But there are many companies often Palantir has talked about, but that's not the only company that has had contracts with the federal government. If you start picking and choosing based on a particular issue that we're upset about, you really destroy the value of the index.
- [69:55]
A
That's my question is what should the bar be? What's. Can you completely ignore political and social trend, you know, trends and issues?
- [70:04]
B
You can't. But when you oversimplify it to say the only way to deal with an issue is selling stock, you really. It's a great slogan. How does that change anything? Because someone else is going to buy the stock in cases where you're still holding that stock to be engaged with the company to try to hold them accountable again. It doesn't always produce the results you want, but at least you can make that effort to hold them accountable. And you know what? Sometimes you can get change direction. And the other piece I want to just mention, Ben, on climate, another very important part of our strategy is not just talking about divest, but investing. We set up a $40 billion allocation of climate solutions and sustainable investing and we got about $28 billion of that out the door because we want to grow the opportunities for the emerging low carbon economy. We want to do more in solar and wind and renewables and clean energy and incentivizing that change in spite of what Trump is doing. I was invited to be at the Paris negotiations. I was on one of the panels that talked about coming up with a low emission index, which back then was viewed as a novel new strategy. You know, doing that proactive invest. We spend so much time about divesting from an oil company. Like that's really going to change a whole lot. And not enough time talking about how are we going to incentivize these new products, these new technologies, how are we going to push those companies that we are still invested in to do the right thing? And it's harder now because of how Trump has disrupted so much. So the bar at the end of the day, to get back to your original question is as we're analyzing the entire portfolio, what is not in the short term best political message? The answer is what is in the long term best interest of our role as an investor to secure retirement benefits for 1.3 million New Yorkers. Is it a judgment call? Do we always want our money to go to the right place? Absolutely. But ultimately our responsibility has to be paramount about having a portfolio that will, will deliver returns so that the pensions will be there. We won't overburden the government partners that are helping to pay in so we can have a thoughtful conversation about Tier 6 reform. If you manage the pension fund just on the politics, you're going to destroy the pension. And I will say this, and I said this during the debate, what these two characters are saying will undermine the retirement security of New York public workers. I don't say that lightly. And people say I don't make enough noise. Let me make some very clear noise. Those two guys will destroy the pension system as we know it by over politicizing it. Over politicizing it. Just trying to make political points. And even with what they're saying, they're not even using accurate numbers. Our independent evaluation, not the political evaluation, our 3, 5, 10 year numbers, we meet our, most of our benchmarks. They're good, strong numbers. That's objective evaluation. That's not political evaluation. You know, I, I find it bizarre that some of the things that they get away with saying, because frankly, I'll say this because we don't have as much attention from the press on this race. A lot of the reporters, they'll just report what these guys say. They don't.
- [73:25]
A
Well, I will, I mean, I will say on that front, and I just interviewed Drew Warshaw and I'll, I'll interview Raj Goyal. But, you know, I will say from a, a generalist, layperson press point of view, it's extremely hard to parse, you know, a very detailed analysis of the, you know, pension fund performance over 20 years with a lot of different, you know, pieces to it compared to even looking at the independent analyses that you're pointing to, when a lot of times they are looking at different things. Right. So it's not like they have the same format and methodology. And you're able to say, oh, here's Warshaw's report and here's the independent report. And this is why you can see that the independent report shows Warshaw's numbers are, are phony. You know, you know what I mean? I mean, it is challenging.
- [74:13]
B
I do, I do. But, you know, when people are confused
- [74:15]
A
in defense of the press, I guess, you know.
- [74:17]
B
No, no, but. Okay, no, no, I'll take it. But, but look, yeah, and I do think there should be more, more, you know, more reporters and More resources and pay them more so they can.
- [74:24]
A
No, and it's good. Listen, in, in the right atmosphere, you would have reporters going to still other experts and saying, help me evaluate this. And it's hard.
- [74:33]
B
But I would say in the absence of that, don't look at what Tom Dinapoli says. Don't look at what a political report that an opponent. Look at what the independent evaluations are saying. And I think it says it very clearly. We are well managed. We have an appropriate level of fees. Our returns are strong. We're not looking to beat the market. I have the most conservative returned long term, assume rate of return because we want to be responsible in meeting our numbers without taking undue risks. And that's why it has all worked and it's all balanced. Even simple stuff, I think. What did one guy say that like $12 billion in fees paid to what you want to add 20 years worth and you're going to say that, come on, why don't you add the 300 billion or 150 billion? 300 billion. Add the $200 we paid out in benefits.
- [75:28]
A
You know, wait, so since you bring it up, let me just ask you quickly because I don't want to keep you too much longer. But, but one of his arguments is that you should be even more actually even more conservative, not trying to quote, unquote, beat the market and bring even more of the pension funds into the index funds that you mentioned. Is he, is he not correct on that? Is that not something worth looking at? Is that a piece of his. I mean, it's like a central piece of his whole campaign. Is that there's too much being. Yeah, go ahead.
- [75:56]
B
Well, here's the contradiction. You know, you want more in index funds and yet they want it. They want to destroy the indexes by pulling out whatever the politically they don't like. You know, it doesn't work. It doesn't.
- [76:05]
A
Okay, but take away the political divestment decisions. Is it worth considering with all this body of work that you have to take another look at how much is in house and how much is out and how much is managed outside? Even if to your point the fees are relatively, you know, normal scale, is it not worth taking another look at, especially over this long term, whether just the index funds are really the smartest bet, as you've gotten out of this two minutes ago, and should even be
- [76:35]
B
more heavily invested in the index funds are the biggest part of our portfolio, number one, whether it should be bigger. Here's my concern. Everything is great. While the Stock market is doing well. And when the stock market doesn't do well, if you're overexposed through index funds, you're going to have a problem. And so that's why we do a detailed analysis every five years and then we have that asset allocation ride for the five years. Sometimes you may do some tactical changes here and there, but you basically go with it. It's not like a whim, it's not a back of an envelope analysis. And so when we made our decision about how much to put in public equities, which is largely indexes versus what to put in fixed income, US Treasuries largely, and then the balance being in the private markets, the reason we do because the fixed income is the safest place to put it. It's not always the place you're going to make the most money depending on rates. So you've got an easy 65%, maybe more in those in the public equities and fixed income, so that the balance divided up between real estate, private equity, infrastructure, credit, opportunistic. The reason you do those other buckets is that you don't want to have everything correlated to what's happening with the stock market. As I said earlier, when the stock market does well, everybody says put more money in stock market, put more money in index funds. Well, the stock market doesn't always do well. And I've been through two really down cycles and I don't know when the next one's going to happen. And so we're positioning the fund to weather that because you know, when you have $300 billion, you don't move. It's like a big tanker, a big ship. You don't move it too quickly. You can't. And so that's why you do your asset. Alocasia led. Right. I think we're at the right level of index funds, but what we've been doing is looking for some other indexes. So for instance, I mentioned the climate solutions. We've done a few billion dollars more in climate related indexes. Again because we want to deal with the issue of climate change. Again, this has been a cost effective way for us to not only make money for the fund, but to also help deal with that climate issue that we're very, very concerned about. So we are always looking for new opportunities. But I think the level of index funds we have now and public equity generally is the right level. It came after careful analysis by our internal staff, by our external consultants, by our investment advisory committee. We have an independent committee that helps guide us on it. And that asset allocation was part of the evaluation that the Department of Financial Services, our regulator, our auditor, said this is part of a balanced, well managed pension fund, an appropriate asset allocation for a large institutional investor of our size. So I believe we're on the right track. All right.
- [79:36]
A
Well, I appreciate that thorough answer and response to all these questions. Comptroller Tom DiNapoli, appreciate the time and thoughts. This was a really in depth conversation about your work in the office and your case for reelection. So I appreciate all the time and thoughts. Thank you.
- [79:52]
B
Thank you, Ben. It was a great a great conversation with you. Appreciate it.
- [79:55]
A
All right. Take care. We'll be watching closely as the election season proceeds.
- [79:58]
B
Seeds. It.