Twenty-nine days past the legal deadline, the Cuomo Administration finally got around to posting the state’s required mid-year financial plan update on the Division of the Budget (DOB) website late yesterday afternoon. As expected, the report does not included an estimate of fiscal impacts from Superstorm Sandy. DOB says it is still working on those numbers.
Somewhat more surprisingly, despite some weakening in revenue trends even before the storm, the mid-year report features no significant change from the first quarter financial update, which was issued (on time) back in July. Slight changes in projected disbursements are offset by equally minor changes in projected receipts, conveniently yielding precisely the same budget gap projections: $982 million next year, growing to $3.6 billion in fiscal 2015 and $4.4 billion in fiscal 2016. In the wake of Sandy, these projected imbalances will surely grow.
State Comptroller Thomas DiNapoli has a more pessimistic outlook. His mid-year report, which also includes no estimate of Sandy’s impact, predicts that revenues will fall short of the governor’s July projections by $441 million in fiscal 2013 and $394 million in 2014, which would boost next year’s gap to nearly $1.9 billion.
On the face of it, the governor’s official financial outlook appears to be on the rosy side. For example, it includes a projected 6.7 percent increase in personal income tax withholding payments in fiscal 2013-14 — which would suggest that DOB, pre-Sandy, was expecting a boomlet in wages (including bonuses) and employment growth next year.
And what do the legislative fiscal staff think? We don’t know, because they have failed to meet their own Nov. 14 statutory deadline for issuing comparable revenue estimates.
Cuomo and the Legislature boasted of their success in passing an on-time budget for the past two years. But their disregard of statutory financial reporting requirements is the kind of “transformation” that could lead to rude shocks in the future.
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