About $2.9 billion Worth of Budget Confusion

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The state budget approved last month by Gov. Spitzer and the Legislature came in higher than initially reported and actually increases spending by $2.9 billion, the state controller said yesterday.

The $121 billion budget passed on April 1 now tips the scale at $123.9 billion, an 8.2% increase over last year, controller Tom DiNapoli said in his annual report.

DiNapoli said the governor and legislative leaders arrived at the lower budget amount by channeling some spending into the past fiscal year and listing certain spending for capital projects as “off-budget.”

For instance, the final budget number did not include more than $231 million sent to a state energy authority that came from fees imposed on utility ratepayers, DiNapoli said.

“The state is running up its credit cards even though we have cash in our pockets,” DiNapoli said, warning the state could face a gap of $3 billion next year.

But Spitzer’s top budget adviser, Paul Francis, argued DiNapoli’s assertions were “highly misleading” because the “off-budget” funding that was left out “historically has not been included as on-budget spending.”

“The governor’s reports on the enacted budget offered more detail than any budget in the past, providing taxpayers with an accurate portrayal of state spending,” Francis insisted.

The Spitzer team, he stressed, was simply following the budget format used by former Gov. George Pataki and was not attempting to understate overall spending.

An expert on the state’s fiscal condition sided with DiNapoli’s budget picture.

“There is no question that spending is growing at an excessive and unsustainable level,” said E.J. McMahon, of the conservative Manhattan Institute.

Whether the two sides will agree next year on what should be counted in-budget and what should be counted off-budget remains to be seen.

“We certainly will be happy to talk to them about whether these things should be off-budget,” said Francis.

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