DiNapoli issues report calling for state debt reform

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ALBANY, N.Y. — New York State Comptroller Thomas P. DiNapoli recently released a report calling attention to the state’s high debt levels and recommending reforms to tackle the problem. He says the state has one of the nation’s highest debt levels, primarily because “measures to restrict the excessive use of debt have been circumvented over […]

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ALBANY, N.Y. — New York State Comptroller Thomas P. DiNapoli recently released a report calling attention to the state’s high debt levels and recommending reforms to tackle the problem.

He says the state has one of the nation’s highest debt levels, primarily because “measures to restrict the excessive use of debt have been circumvented over the years in state budgets.” Since the Debt Reform Act was passed in 2000, state-supported debt outstanding increased by
$25 billion. The state Division of the Budget projects that over the next five years, this debt will increase by $26 billion, or 42 percent, from $61.9 billion in state fiscal year (SFY) 2021-22 to $88 billion in SFY 2026-27.

The DiNapoli report identifies policy and fiscal weaknesses that “have allowed state debt to grow to troubling levels and offers a roadmap for state debt reform to improve debt affordability and protect New York’s fiscal health.” His office projects that debt service will consume an increasing share of state operating-funds spending over the next five years, growing from 5.4 percent to 5.9 percent. This reduces flexibility in the operating budget and leaves fewer resources available for other priorities and programs, the comptroller contends.

“New York state has a history of misusing borrowing to pay for short-term needs while a backlog of long-term infrastructure projects languishes,” DiNapoli said. “Caps and other restrictions on debt set in statute have not worked to rein in our debt or stop inappropriate borrowing practices. New York needs comprehensive and binding debt reform to ensure more affordable borrowing levels, more responsible debt decisions, and greater accountability to the public.”

The state comptroller recommends the following debt-reform measures:

Establish comprehensive, binding debt limits. Meaningful debt reform needs to be addressed through a binding constitutional amendment to impose limits on all existing and future state debt. The calculation should be based on a rolling 10-year average of personal-income growth, which will provide enhanced stability and predictability for capital and debt-financing plans.

Provide accountability to voters. State debt limits should be subject to voter approval, and all state debt should be required to be issued by the state comptroller. “This would isolate long-term liabilities and their associated costs from the temptations of annual budget-cycle gimmicks and prevent short-sighted solutions for near-term budget relief,” DiNapoli contends.

Establish responsible and sustainable practices. All state debt should be required to be issued with a level or declining debt-service structure, be limited to a final maturity of 30 years or less, and must begin to be repaid within one year. The use of state debt should be precluded from solely benefiting private enterprise.

Give flexibility in times of emergency. The constitution’s emergency contingencies should be updated to account for the potential crises of the modern era, while establishing boundaries around such possible uses.

DiNapoli’s full report on state debt reform is available at: https://www.osc.state.ny.us/files/reports/pdf/roadmap-for-state-debt-reform.pdf

Bowers enters Rochester market with acquisition

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SYRACUSE — Syracuse–based Bowers & Company CPAs, PLLC has expanded its footprint into the Rochester marketplace. The accounting firm has acquired Robinson & Gordon Certified Public Accountants, P.C. of Rochester in a deal that became effective Jan. 1, per its Jan. 23 announcement. The two firms did not disclose financial terms of their agreement. Bowers

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New Dermody, Burke & Brown CEO had been the firm’s longtime COO

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SYRACUSE — Dermody, Burke & Brown, CPAs, LLC started the new year with a new CEO leading the Syracuse–based accounting firm. Carolyn Sturick had been the firm’s COO for the past 13 years. She succeeds Madelyn Hornstein, who has served as the firm’s CEO since 2010. As CEO, Sturick will focus on strategies to ensure

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Fischman joins Barclay Damon as associate attorney

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SYRACUSE — Barclay Damon LLP on Feb. 16 announced that Menachem Fischman has joined the law firm’s corporate practice area as an associate attorney. His primary office is at the firm’s headquarters in Syracuse. Fischman represents startups and established businesses in corporate, commercial, and investment transactions and provides general counsel to companies, entrepreneurs, and investors.

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Harris Beach elects Syracuse attorney, Roy, as partner

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SYRACUSE — Harris Beach PLLC announced it has elected attorney Brian Roy as a partner in the law firm. Roy focuses his practice on financial restructuring, bankruptcy, and creditors’ rights. Working from the firm’s Syracuse office, he represents creditors and debtors in bankruptcy cases across the country, according to a Harris Beach news release. Roy

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New York law to prevent retaliation against lawful absences takes effect

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ALBANY, N.Y. — A new state law that protects workers from retaliation against lawful absences from work went into effect Feb. 21. The law (Senate Bill S1958A and Assembly Bill A8092B) was signed last November by Gov. Kathy Hochul. It clarifies that it’s illegal for employers to threaten, penalize, discriminate, or retaliate against employees for

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Ask Rusty: About Social Security’s “First Year Rule”

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Dear Rusty: I’m considering filing for my Social Security (SS) at age 64 in February, before my full retirement age of 66 years and 10 months. I’m working full time and would like to continue earning until I meet the $21,240 limit for this year. When does the $21,240 limit go into effect? Does it

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Dear Rusty: I’m considering filing for my Social Security (SS) at age 64 in February, before my full retirement age of 66 years and 10 months. I’m working full time and would like to continue earning until I meet the $21,240 limit for this year. When does the $21,240 limit go into effect? Does it start after receiving my first SS benefit deposit? Or does Social Security go by my year-to-date earnings starting on Jan. 1?

If I file in February and it takes 90 days to receive my first SS deposit, and at that point my year-to-date earnings are $18,500, can I continue to work until I earn the balance of the $21,240 ($2,740) and then stop working? Or do they only count the earnings after I receive the first benefit payment? I know that for anything earned over $21,240 I’ll need to repay $1 for every $2 over the limit.

Signed: Ready to Retire

Dear Ready to Retire: Since you haven’t yet reached your full retirement age (FRA), if you claim now and are working, things will work somewhat differently during your first year collecting benefits.

If you claim for your benefits to start in February, only your earnings starting in February count toward the earnings limit. But during your first calendar year, once your benefits start, you’ll be subject to a monthly earnings limit of $1,770 and, if that is exceeded in any month (February through December), you won’t be eligible for benefits for that month. That means that the Social Security Administration (SSA) could withhold your entire monthly amount for any 2023 month after January that exceeds the monthly limit. This is part of Social Security’s “first year rule,” which applies only during your first calendar year collecting. If, instead, you claim for your benefits to start in March, then the monthly limit will apply from March thru December. Remember, it’s not when your payment is received that counts; it’s when your benefits start (the SSA pays benefits in the month following the month earned). Beginning in 2024 only the annual limit would apply.

Nevertheless, the first-year rule offers some latitude on your earnings. If the penalty for exceeding the annual earnings limit ($21,240 for 2023) is less than the penalty which results from using the monthly limit, the SSA will use the annual limit and assess the smaller penalty amount. So, if your annual (full year) 2023 earnings are less than $21,240, no penalty will be assessed, or if you only exceed the annual limit by a small amount, you’ll be assessed a penalty of $1 for every $2 you are over the limit. But if your annual earnings are substantially more than the 2023 limit, the SSA may deem you temporarily ineligible to get benefits. When you complete your application there will be a section asking you to tell the agency about this year’s earnings as well as what you expect next year’s earnings to be. From that, the SSA will decide whether you are currently eligible to collect benefits.

So, if your goal is to work only to the point that no penalty will be assessed, you can work until your 2023 earnings reach $21,240 (whenever that is). Or you could work even a little bit longer and simply take the penalty (half of what you exceed the annual limit by), in which case the SSA will simply withhold future benefits for enough months for it to recover what is owed for exceeding the limit. But if you continue working full time and will substantially exceed the annual limit, it’s likely the Social Security Administration will say you are temporarily ineligible to collect benefits (until your earnings are less or you reach your full retirement age when the earnings test no longer applies).

Russell Gloor is a national Social Security advisor at the AMAC Foundation, the nonprofit arm of the Association of Mature American Citizens (AMAC). The 2.4-million-member AMAC says it is a senior advocacy organization. Send your questions to: ssadvisor@amacfoundation.org.

Author’s note: This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity.

VIEWPOINT: Governor Hochul Vetoes Changes to Wrongful-Death Law

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On Jan. 31, 2023, New York Gov. Kathy Hochul vetoed a bill designed to dramatically overhaul the state’s wrongful-death statute by permitting the family members of wrongful-death victims to recover for emotional distress. Under the current law, economic recovery for wrongful-death claims is primarily limited to the lost earning potential of the deceased individual. The Grieving

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Under the current law, economic recovery for wrongful-death claims is primarily limited to the lost earning potential of the deceased individual. The Grieving Families Act (Senate Bill S74A) would have changed this by allowing the additional recovery of emotional and non-economic damages. Specifically, the bill would have allowed monetary damages for “grief or anguish caused by the decedent’s death, and for any disorder caused by such grief or anguish;” “loss of love, society, protection, comfort, companionship, and consortium resulting from the decedent’s death;” and “loss of nurture, guidance, counsel, advice, training, and education resulting from the decedent’s death.” Historically, the estates of wrongful-death victims have been strictly forbidden from recovering these types of damages, and the proposed bill would have drastically increased the potential value of wrongful-death lawsuits.

Other notable changes in the bill included an extension on the limitations period within which a deceased individual’s estate could seek to recover for wrongful death and an expansion of the class of persons able to recover on a wrongful-death claim. The bill would have extended the statute of limitations from the current two-year limitations period to three and a half years. The legislation also would have permitted all “close family members” to recover on a wrongful-death claim. The proposed legislation left it up to the finder of fact to determine who qualified as a close family member. Under the current law, only specified persons are permitted to recover on a claim.

In an op-ed explaining her veto, Gov. Hochul lauded the goals of the Grieving Families Act, but expressed concerns over potential unintended economic consequences. The governor specifically noted that the bill, as proposed, could have driven up health-insurance premiums and added significant costs to many sectors of the economy, noting hospitals in particular. As a proposed compromise, Hochul suggested implementing a version of the bill that exempted medical-malpractice claims.

Given the broad bipartisan support for the bill, the New York Legislature is expected to bring another version to Gov. Hochul’s desk in 2023.

Jackson K. Somes is an associate attorney in the Rochester office of Syracuse–based Bond, Schoeneck & King PLLC. He concentrates his practice area on commercial litigation matters, issues involving school law and defending medical-malpractice lawsuits. Contact Somes at jsomes@bsk.com.