State tax receipts are lower than projected, threatening some of the biggest deficits in nearly a decade, according to the state comptroller’s office and a fiscal watchdog.

“New York faces serious fiscal challenges,” said state Comptroller Thomas DiNapoli. “Projected budget gaps, weaker than expected personal income tax collections and cuts to federal programs combine for a triple threat of budgetary risks.”

DiNapoli, a Democrat, said any new federal funding cuts “could force difficult decisions regarding the funding of important programs and services.” In past years, when budget deficits were as much as $10 billion, cuts were made to health care and education, the biggest spending areas of the budget.

Although Cuomo has said in recent weeks that he anticipates a $4 billion deficit in the coming fiscal year, E.J. McMahon of the fiscally conservative Empire Center think tank said DiNapoli’s updated estimates could indicate a shortfall of as much as $6.8 billion. The current budget totals $163 billion including federal aid.

“The comptroller’s new estimate boosts the shortfall to $6.8 billion, by far the biggest prospective blob of red ink on Albany’s books since Cuomo took office,” McMahon said.

The Cuomo administration didn’t reject the projections by DiNapoli and McMahon, but noted they don’t include the cutting and cost-saving measures Cuomo uses in his budget proposals to keep annual spending increases around 2 percent.

“This administration has held spending growth to 2 percent — lower than any prior administration — which helps the financial plan to weather volatility,” said Cuomo’s budget spokesman, Morris Peters. “But with significant risks stemming from Washington, we are closely monitoring the situation as we prepare the state’s midyear update to the financial plan.”

McMahon said that even if Cuomo again keeps the increase in spending to around 2 percent, DiNapoli’s “estimate indicates the gap has grown to the daunting level of $5.4 billion, equivalent to nearly 6 percent of total state operating funds spending.”

By Nov. 15, Cuomo, the Senate and Assembly are by law to report actual, estimated and projected state tax receipts and spending for the current year and for the next fiscal year.

Cuomo is crafting his 2018-19 budget proposal that he will release to the legislature in January. The budget is due by April 1.

You may also like

The good, the bad and the ugly in Cuomo’s budget

“We are at the early stages of what shapes up as the biggest state and city fiscal crisis since the Great Depression,” said E.J. McMahon of the Empire Center. “Borrowing and short-term cuts aside, the budget doesn’t chart any clear path out of it.” Read More

Medicaid cuts make the state budget, with some tweaks

Bill Hammond, director of health policy at the conservative-leaning think tank the Empire Center, suggested this is because the proposed cuts are meant to slow the otherwise rapid growth in Medicaid spending, which means an increase is still possible.  Read More

Gov. Cuomo’s Lawsuit on Pres. Trump’s Tax Cuts Dismissed

But according to the Empire Center, a non-profit group based in Albany, the overall impact of the Trump tax cuts actually benefited most state residents. Read More

EDITORIAL: State schools continue spending more for less

As reported by the Empire Center last week, “The number of students enrolled in New York state public schools is the lowest recorded in 30 years.” Since 2000, enrollment in public schools has declined by more than 10 percent statewide with most of it upstate as enrollment in New York City schools has increased 1.3 percent in the last 10 years. Students are not leaving to go to private or parochial schools either because they, too, are showing declines, down about 8 percent in the last decade. Read More

$1 billion semiconductor plant: ‘Flashy mega-project’ or ‘transformational investment’ for New York?

"The state is continuing its strategy of pursuing flashy mega-projects instead of making New York more attractive for all businesses. We're now in the second decade of this approach, and it's still failing to deliver the promised results," Girardin said. "This is the sort of economic development strategy that politicians turn to when they don't want to take on the tougher questions." Read More

Cuomo blames lawmakers for plate fee set by his administration

The new replacement policy, which was tucked into a press release announcing new plate designs, has been criticized as a "revenue enhancer wrapped in a public relations ploy" by E.J. McMahon of the fiscally conservative Empire Center for Public Policy. Read More

New York license plate fee increase draws criticism

"The 'current' $25 fee was for an optional plate choice," said E.J. McMahon, research director at the Empire Center for Public Policy. "The new fee will be mandatory -- the first time ever.  This is a revenue grab under the guise of a PR stunt. Yes, the plates need replacement.  But they don’t cost $25 apiece to manufacture." Read More

Medicaid bungle cost state $102 million over 4 years

“A little series of mistakes in a program this big can add up to a lot of money in a hurry,” Hammond told The Post. “A quarter of a million dollars is a lot of money. It’s important that the auditors are looking at this and are pointing to things that could be fixed.” Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.