Democratic Comptroller Candidates Pitch Skills and Plans to Budget Watchdog
(l-r) Brad Lander, Brian Benjamin, Michelle Caruso-Cabrera, Corey Johnson, David Weprin, Zach Iscol
Six leading candidates running in the Democratic primary for New York City Comptroller in the June election appeared at a forum on Tuesday to offer their perspectives on the role of the office, solutions to the city’s uncertain fiscal future, and how they would wield their powers to ensure city government is effective and fiscally responsible.
The candidates at the forum, hosted by Citizens Budget Commission, a nonprofit fiscal watchdog group, included Brooklyn City Council Member Brad Lander, military veteran and entrepreneur Zach Iscol, Manhattan State Senator Brian Benjamin, financial journalist Michelle Caruso-Cabrera, City Council Speaker Corey Johnson, and Queens Assemblymember David Weprin. The candidates, selected by CBC from about 10 who will be on the ballot, seemingly based on their fundraising and polling, sought to tout their credentials and set their campaigns apart with just six weeks till the primary, which will be run with ranked-choice voting for the first time and, given Democrats’ heavy enrollment advantage, is all but assured to determine the next city comptroller.
The forum, where candidates appeared one at a time to take questions from CBC President Andrew Rein, showed significant differences among the contenders’ resumes, priorities, and plans for the office.
The comptroller is the city’s top fiscal officer and oversees the city government expenditures, tax revenues, pension investments, settlement of claims, auditing of city agency performance, among other roles. The office also provides a bully pulpit to hold the mayoral administration’s feet to the fire and can act as a springboard to running for higher office – current Comptroller Scott Stringer, a Democrat, is term-limited and is running in the primary to replace outgoing Mayor Bill de Blasio. His predecessor, John Liu, also ran for mayor, and is now a state senator.
The next comptroller will be called on to keep a watchful eye on the city budget at a crucial juncture. After the fiscal devastation of the coronavirus pandemic, New York City received $6 billion in direct budgetary aid to plug tax revenue holes through President Joe Biden’s American Rescue Plan, along with $7 billion for public schools and $1 billion in reimbursements through the Federal Emergency Management Agency. That has helped Mayor de Blasio balance the current and next fiscal years’ budgets, but gaps of nearly $4 billion for the next three fiscal years remain in the city’s latest projections, though there are a great many unknowns about how the city’s economy will bounce back and what tax revenues may look like. There are a number of reasons for concern and for optimism.
As Rein pointed out at the forum, those gaps are closer to $5 billion because the mayor has promised $1 billion in labor savings without specifying how he will achieve them. At the same time, the city’s pension obligations are also growing and the city will spend $10.3 billion on pension contributions from its operating budget in the next fiscal year, about $1 billion higher than five years ago.
At Tuesday’s forum, the six candidates presented different priorities for their approach to the office, but they all shared some similar views. Every one of them said that the city should be required to put money into a rainy day fund when the economy is growing and should only be able to withdraw from it in times of recession. They also agreed that the city’s Retiree Health Benefits Trust fund remains woefully underfunded and should be bolstered to protect the city’s pensioners. They did split on whether there are any situations where the state Financial Control Board should have the authority to approve the city’s fiscal actions – Iscol, Benjamin, and Caruso-Cabrera said the board should be able to do so if the city’s finances, particularly debt, get out of control, harkening back to the board’s creation during the city’s 1970s fiscal crisis.
On a scale from one to five, the candidates almost all gave themselves a “four” on their familiarity with Generally Accepted Accounting Principles – Caruso-Cabrera gave herself a “three to four” while Weprin gave himself a “four-and-a-half” rating.
Lander, who has represented Council District 39 since 2010, said the next comptroller needs to closely watch how federal aid is spent, and has proposed an American Rescue Plan spending tracker, which he hopes to create through legislation before the City Council.
“The job of the comptroller is to take the long-term view on the city to make sure we’re spending wisely, that we invest in ways that stimulate recovery, to hold the city accountable to our shared goals and to prepare better for future crises,” he said.
Lander said among his main priorities would be to ensure the one-time federal aid is spent wisely and the city doesn’t “create new longer-term obligations that we can’t afford down the road.” He said he would continue to push for reforms to the city’s capital spending, which is between $8 and $10 billion each year and Lander has focused on during his Council tenure.
“Right now, more than half of that is over budget or behind schedule, and I’ll push for reforms that can save hundreds of millions of dollars every year and get better infrastructure created on time,” he said. And he promised to undertake a “catastrophic risk assessment” as soon as he enters office to evaluate the long-term fiscal risks to the city.
Pressed to reconcile his progressive beliefs in expansive government with his push for fiscal responsibility, Lander said, “I want bold government action to help us recover from this crisis. We’ve needed it in this crisis, and we’re going to need it to recover from this crisis to build a platform for shared economic growth…To me, not only is there not a contradiction, it’s an obligation of progressives to care about the budget, to care about the details, to get in there and really understand how we make government work better.”
Among the ways he said he would push for more savings by the city is a Program to Eliminate the Gap (PEG) with a focus on employee attrition, using the comptroller’s office to identify which agencies can save the most funds through headcount reduction. Lander wants to use the auditing powers of the office to more strategically audit agencies, providing them with goals of improvement to meet rather than just point to deficiencies.
Lander said it may be prudent for the city to reduce it’s target of pension returns from 7% to 6.8% to ensure that the pension funds don’t make risky investments even if it means paying more into them each year through the city budget.
Iscol abandoned a campaign for mayor to jump into the comptroller’s race instead. “There is a reason that this is not an office that works for the mayor,” he said on Tuesday. “I think a lot of people often talk about the comptroller as the chief financial officer for the city. I actually don’t see it that way…I think that this role really more than anything else is the chief accountability officer of the city, the person whose job it is is to make sure the city is doing its job.”
Iscol said he would create benchmarks for finding savings and addressing the structural fiscal deficiencies in the budget, criticizing the current comptroller for not going far enough to identify savings. “Making sure city spending is tied to outcomes will be a huge priority, especially in the approval of city contracts,” he said.
He also said he would find creative ways to use the office to spur the city’s economic revival, though he did not offer specific solutions. On savings as well, he provided vague answers, as de Blasio has, for balancing the budget with labor savings. “I would be looking for healthcare savings, I would be looking for labor savings. I would be making investments in the labor force,” he said. “I think this is one thing that people get wrong. We think of labor savings as meaning that you’re going to be cutting the workforce. I actually think that when you make cuts, when you don’t pay people market rates…you’re not investing in the workforce.”
He did point to one specific area where savings could be achieved: reducing the city’s reliance on outside consultants.
Iscol was more definitive when asked for agencies for which he would set benchmarks in audits to measure their performance, citing the Department of Sanitation and the Department of Homeless Services. He said he would look to other municipalities that have lower costs of sanitation services and those that have ended veteran homelessness, a particular concern for him.
Iscol said he’d use the power over contract approval to ensure that providers are meeting specific outcomes. “Creating benchmarks is partly about looking around the world, looking around the country, looking at other municipalities and seeing how other places are solving these problems, seeing how much they are spending, seeing what solutions they’re bringing to bear,” he said. “We don’t have to always reinvent the wheel here at home.”
To improve pension returns, he said he would implement several more recommendations from a 2015 report commissioned by Stringer’s office, which he said could lead to between 1-2% more in returns for the city.
Benjamin was reelected last year to represent Senate District 30, which includes Harlem, the Upper West Side, Washington Heights, Hamilton Heights, and Morningside Heights.
He said he would be “completely focused on auditing and investigating city agencies,” particularly the NYPD and the Department of Education for performance audits “because if those two agencies don’t work for the city of New York, particularly for those who are most underserved and marginalized, the whole system doesn’t work.”
On the NYPD, specifically, he said, “For me it’s more about how are we making sure that every single dollar we spend is most efficiently keeping us safe. And I think that there is, if you really dig into the budget you’ll find…there’s a lot there that should probably be someplace else.”
Relying on his previous investment banking and wealth management experience at Morgan Stanley, Benjamin said he would use the comptroller’s office to make targeted investments that support underserved communities, such as investing in affordable housing, affordable homeownership and permanent supportive housing, while also ensuring an adequate rate of return for the pension funds.
But his immediate attention would go to the federal stimulus funding. “We need to make sure that that money is being spent, and that it’s helping to drive the recovery, and what we need to be concerned about is, is that money going towards recurring or non recurring expenses? Because if we are putting that money towards expenses that recur, we’re setting the city up for failure,” he said.
Benjamin also serves on the board of Brown University, his alma mater, and has repeatedly touted the success of its investment committee, promising to bring that same approach to the comptroller’s office. He said he would work to attract top talent from the private sector to appoint a chief investment officer and others in the Bureau of Asset Management, though he noted that the public sector does not have the ability to pay comparative salaries to the private sector. “The key is to not villainize people, but to reach out to people and say, ‘Listen, this is your city. You have enormous experience. You’ve done extremely well. New York City has been incredibly valuable to you. I need you to give back and play this important role,’” he said.
“I think there’s a real opportunity for the investment class to play an important role in our recovery,” he added.
Caruso-Cabrera noted she is the only woman in the ‘top tier’ of candidates, though there are other female candidates in the race as well (who have extensive relevant experience but are unknown and have struggled to raise funds), and the sole Latino candidate in that tier.
Caruso-Cabrera’s pitch for comptroller derives heavily from her decades-long experience as a financial journalist, covering financial crises and recoveries across the globe in countries including Cuba, Iran, Ukraine, Iraq, Italy, Greece, Russia, and Venezuela. “Those are of course, all very different places, but in each, it was always the same. Marginalized and underserved communities always paid a disproportionate price when disaster struck…And as a journalist I saw over and over again that those who can least afford to pay, they always end up paying the most and I’m very worried that without the right kind of leadership in the city, we could easily go down the same path,” she said.
Caruso-Cabrera wants to use the office of comptroller to ensure the city has an equitable recovery from the pandemic, using forensic audits to ensure that city funds are spent wisely. “I know how to use income statements, balance sheets, and cash flows to be both tools, and in the right hands, they can be weapons,” she said.
As she rightly pointed out, the office is a helpful stepping stone for greater political ambitions and she has called on the other candidates to pledge not to run for mayor – along with Iscol, Council Speaker Johnson also gave up running for mayor to join the comptroller’s race. But Caruso-Cabrera is solely focused on the job, she said. “I just want to really do the job because I know how important it is in this moment in time that New York City has a turnaround,” she said.
Among the agencies that she vowed to audit as comptroller is New York City Health + Hospitals, a public benefit corporation and quasi-city agency that runs the largest public hospital system in the country. She pointed, for instance, to Elmhurst Hospital, which was inundated with patients at the height of the pandemic last year while other hospitals had ample space. “Clearly there are tremendous inefficiencies there that led to the most vulnerable people in our city suffering the most,” Caruso-Cabrera said. She also promised to closely examine the Department of Education and the NYPD. “What does the NYPD spend their money on? I want to know, because it’s very controversial right now. So I’ve seen a couple of performance audits, I want to look at the whole gamut.”
She said the city pension funds should likely use a “barbell strategy” that balances high-risk and low-risk investments until there is an increase in interest rates. “I think we should be more liquid, and if it comes down to it, we need to make clear to the City Council the costs they are running up when they do not actually fund a lot of the outstanding costs related to our retirees, not just the pension funds,” she said.
Johnson is serving out his second and final term on the Council, where he represents District 3 on the West side of Manhattan and has been speaker for the current term. “I’ll make sure that every dollar we get for covid relief is targeted directly to our recovery and the New Yorkers who need it most,” he said on Tuesday, promising that as comptroller, he’ll create a Recovery and Rebuilding Unit within the office.
As with the other candidates, Johnson has promised to undertake performance-based audits of the largest agencies including those for education, policing, homeless services, and housing. “The comptroller has subpoena power, the comptroller has audit power, and the goal is to provide that information to the Council and to the next mayor so that when they’re making budgetary decisions, they’re hopefully putting money into programs that are working and taking money away from programs that aren’t working,” he said.
Johnson has proposed a few new ways that he would structure the functions of the comptroller. He would create a new database of Audits, Claims, Efficacy and Settlements (ACES), which would combine various reports put out by the office to help the public compare an agency’s performance along those different lines.
He has also proposed creating a CLIMB (Capital Lending and Investing for Minority Owned Businesses) fund that would provide low-interest loans through the pension funds to small minority-owned businesses in communities hardest hit by the pandemic.
On the pension front, Johnson said the city should reduce its reliance on outside investment managers, who are paid up to $800 million in fees each year. “We should have looked at…would common index funds actually get a similar return on investment than some of the outside investment funds we’re using right now? You’d cut down on the fees and you actually may get a better return than the annual expected return,” he said.
Weprin has represented Assembly District 24 in Queens for five terms. He often touts his previous experience on the City Council, chairing the prominent finance committee during previous fiscal crises, and his work for major financial firms on Wall Street for two decades, among other experience, as his qualifications for comptroller.
As comptroller, Weprin has promised to open up satellite offices across the five boroughs to expand the comptroller’s reach and provide assistance to small businesses and minority- and women-owned businesses (M/WBEs) as they attempt to access federal stimulus funds to recover from the pandemic. “I think that’s a legitimate function for the controller to get involved in,” he said when Rein pushed on the function of opening those offices to help businesses.
Weprin wants to conduct regular audits of every agency, on an annual basis as opposed to every four years as required by the City Charter. He said he wouldn’t hesitate to increase the office’s auditing staff to meet that goal, ensuring it could be funded by finding savings elsewhere and auditing the outside contracting budget. “There’s a lot of waste in some of those contracts,” he said.
He also promised to streamline the process of registering contracts for nonprofit human service providers, who often can go months, if not more than a year, without being paid, forcing them to the brink of insolvency.
The Democratic primary for Comptroller, like other primaries for city government positions, will take place in June, with early voting June 12-20 and primary day June 22. Also running in the Democratic primary are Reshma Patel, Terri Liftin, and State Senator Kevin Parker.
For more on the Comptroller candidates, watch each talk with Gotham Gazette editor Ben Max about their resumes and priorities:
WATCH: 30 Minutes with the Candidates for New York City Comptroller