October 29, 2025 — Traditionally at PEF Conventions, New York State Comptroller Tom DiNapoli could be found on Sunday at the President’s Reception meeting and greeting delegates before they head to the Convention floor on Monday morning. This year, due to unprecedented cuts to the federal budget and the government shutdown, PEF President Wayne Spence invited DiNapoli to a panel discussion on the Convention stage on Oct. 20, alongside PEF Vice President and Statewide Political Action Committee Chair Randi DiAntonio.
Understanding the impact
DiNapoli said that since June 2025, New York has seen a direct impact to its budget as a result of federal cuts and the passage of the U.S. budget. About a third ($93 billion) of the state budget is funded by federal dollars.
“Right now, we’re in pretty good shape, but there were an additional round of healthcare cuts and Medicaid cuts. (The shortfall is) about $750 million in this year’s budget,” DiNapoli told delegates. “When you consider the size of the budget and that our revenue is higher than projected, we could absorb whatever the impact was going to be. The problem is next year, and the year after that, and the year after that.”
In terms of the state workforce, DiNapoli said that about 9,000 state employees are tied directly to federal funds. Eighty percent of employees at the New York State Department of Labor are federally funded. The Office of Temporary and Disability Assistance and the State Education Department are about 40 percent funded by the federal government, as are about 25 percent of employees who work in healthcare settings.
DiNapoli also spoke about the human impact of healthcare cuts.
“The way these cuts are targeted is largely at healthcare and safety-net programs,” he said. “What is it going to mean if some of our neighbors, friends and family members who are now getting health insurance from the essential plans or the Affordable Care Act—if they’re going to lose that coverage—what will that mean for them?”
Other programs around climate change, energy transition, and food assistance are also on the chopping block. PEF members help administer the Supplemental Nutrition Assistance Program (SNAP), which if eliminated, could lead to as many as 300,000 New Yorkers losing the benefit that helps them feed their families.
Tier 6 Reform
President Spence asked about additional Tier 6 reform. DiNapoli said his main goal is to make sure the pension plan is always as close to fully funded as possible. He also said that while he is not in control of changes made to Tier 6, he recognizes that every reform comes at a cost.
“Changes to Tier 6, COLA (Cost of Living Adjustment) enhancements, those are all done by the Legislature and the Governor. We have had some enhancements to Tier 6, thanks to your advocacy, and I know there is pressure to do more,” said DiNapoli. “Well over half of our employees are Tier 5 and Tier 6 now. There is going to be a cost impact, and we do try to make money through our investments.”
Pension investments are subject to fluctuations in the stock market. Tariffs that were enacted by the Trump Administration caused some markets to swing downward in March, then recover in April.
“We still landed at the end of our fiscal year on March 31 at 5.84% positive return,” said DiNapoli. “So, we are meeting our targets. If benefit enhancement is going to affect the cost, I have to make sure that we are charging the employers a rate to keep us as close to 100% funded as possible. My obligation is to you as members to raise the rates if I have to.”
DiNapoli believes that additional pension reform is possible, especially because of the recruitment and retention issues among state agencies. So far, he said he’s heard no objections from employers because they see the value in a better pension system.
“I think the more that labor can work together, I think we will see more of the changes that have happened already—like the change in terms of the salary average from five to three years, the change in vesting and the change in overtime calculation—more changes like that will happen because labor spoke with one voice,” said DiNapoli.
Employer audits by the Comptroller
One closing question came from Vice President DiAntonio.
“The Office of the State Comptroller (OSC) audits state agencies,” said DiAntonio. “And for those of us who sit at our Labor Management tables, we often turn to these reports to address overtime and staffing with the employer. Can you tell the delegates about those audits and where they can find them?”
DiNapoli said all audits are on the comptroller’s website. Many of them are conducted by PEF members. He said audits can be a good way to save New York money or figure out if more money should be spent, especially when it comes to staffing.
“We often get good suggestions from rank-and-file state employees, including PEF members, on where to audit,” said DiNapoli. “I think it is great when you all get involved and find ways for us to save money, especially given all the things we’ve talked about surrounding the federal cuts to services.”
Israeli bonds tied to pensions
President Spence knows that PEF members have strong opinions on worldly affairs. There were some questions from Convention delegates regarding how their pensions invest in Israeli bonds, given the violence in the Middle East.
In response, DiNapoli said in his opinion as a fiduciary pulling that money would not be in anyone’s best interest.
“We take the overall position that we are an investor, not a divestor,” said DiNapoli. “If we put all our money in a savings account, nobody would argue with us. But we wouldn’t be making enough money to pay for the pensions, which is really our obligation.”
DiNapoli said the State’s fixed income portfolio has been investing in Israeli bonds since before he became Comptroller in 2007. The return on the investment has been safe and reliable, said DiNapoli, about 5%. He also said that he understands that there are a lot of people hurting because of the situation in Gaza.
“I try to explain to people that we’re invested in the bonds. We’re not supporting a particular government in Israel,” said DiNapoli. “I have my own opinions as well, but I can’t let my opinions, or other people’s personal opinions or political agendas, drive the pension. It is not fair to all of you.”
At the end of the roundtable, DiNapoli thanked PEF members for their hard work and dedication.
“Thank you for your support and for supporting each other. Your unity is needed now more than ever,” he said.