For a sixth consecutive year, Governor Andrew Cuomo is behind schedule in issuing the state’s Mid-Year Financial Plan Update—maintaining his perfect record of never once complying with the state Finance Law provision requiring such a report by Oct. 30.
Both the governor and the legislative majorities also have once again blown past the Nov. 5 statutory deadline for “separately prepar[ing] and mak[ing] available reports on estimated state receipts and state disbursements for the current and ensuing fiscal years.” Once again, the only state leader to meet that deadline was state Comptroller Thomas DiNapoli, who issued his report last week, pursuant to the “quick start” procedural requirements of the January 2007 budget process reform law that Cuomo effectively has turned into a dead letter.
To repeat a point previously (annually) made in this space, the state’s quarterly financial-plan update is no mere bureaucratic formality. It’s a crucial disclosure document, providing a detailed accounting of the state’s progress in meeting key budgetary goals. The mid-year update, in particular, is an indispensable guide to the fiscal trends that will shape the next Executive Budget—which Cuomo must present in January, looking toward adoption by the start of a new fiscal year on April 1.
And, again, this also says a lot about the Legislature. The Finance Law imposes a number of disclosure and transparency requirements on the Executive–but the only enforcement mechanism is the Legislature’s presumed interest in leaning on him to toe the line. When legislative leaders are apathetic about financial disclosure, the taxpayers are left in the dark.
The numbers in DiNapoli’s report last week point underscore the continuing weakness in revenue growth that the Mid-Year report should be expected to address. As first noted here in mid-October:
Total state tax receipts for September came to $8 billion, according to the monthly cash report issued by the state comptroller’s office late Friday. That was $91 million below the target set in the revised financial plan issued by Governor Cuomo’s Division of the Budget (DOB) in mid-summer—which, based on weak first quarter performance, already had made a $600 million a year downward adjustment in projected annual tax revenues through 2020.
Boosting concerns about underlying economic conditions, the weakness is concentrated in the state’s largest revenue category, the personal income tax (PIT). September is an especially important month for evaluating the outlook for PIT receipts, because it marks the mid-point of the fiscal year and because Sept. 15 is one of four quarterly filing periods for estimated tax payments by investors, business owners and self-employed people.
PIT receipts in September totaled $4.7 billion, a full $300 million (7.4 percent) below the reduced estimate in the July financial plan. The results were also $343 million below PIT collections for September 2015. Through the first six months of the fiscal year, net personal income tax receipts are a whopping $734.3 million below the amount collected by the state at the same point a year ago.
Since the end of the Great Recession, the engine of growth in the state’s economy—and its revenue base—has been New York City. But trends in the city are not reassuring, based on a quarterly economic update issued today by City Comptroller Scott Stringer. Among other things, Stringer’s report cited a slight uptick in the unemployment rate, a second consecutive quarterly decline in the number of jobs in high-paying sectors, and near-stagnant personal income tax receipts.
The next statutory budget process deadline is Nov. 15—next Tuesday—by which time representatives of the governor, legislative fiscal committees and the comptroller are required by the Finance Law to hold a public meeting “for the purpose of jointly reviewing available financial information to facilitate timely adoption of a budget for the next fiscal year.” Their consensus report on projected receipts and disbursements is supposed to the posted on the internet that same day.