State revenues could drop $3.5 billion over the next fiscal year as a result of the continuing financial crisis, according to a just-issued report from state Comptroller Thomas DiNapoli. DiNapoli ends his report on what apparently is intended to be an upbeat note:
The situation remains fluid and serious. Nevertheless, it should be remembered that New Yorkers have navigated through difficult situations in the past.
Well, at least he didn’t claim those “difficult situations” had been successfully navigated. In fact, past precedents for the aftermath of fiscal meltdowns in New York are not encouraging.
In the wake of Wall Street’s downturn in the late 1980s, then-Gov. Mario Cuomo and Mayor David Dinkins nearly ran the state and city into the ground with ill-advised tax hikes, not to mention costly debt. A decade later, over then-Gov. Pataki’s veto, the Legislature and Mayor Bloomberg responded to the 2001-02 market downturn by avoiding significant spending cuts. Instead, on the assumption that the downturn was temporary, they significantly increased income and sales taxes for three years.
As documented in this Empire Center report, the negative impact of those temporary tax increases was overwhelmed by the positive effects of federal fiscal policy, including the accelerated Bush tax cuts of 2003 — which took effect the same day as the state and city tax hikes. We’re not about to get that lucky again. This is not a short-term problem.
About the Author
You may also like
Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough
Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget.
Read More
New York’s Medicaid Spending Is Running Billions Over Budget
New York's Medicaid program ran billions of dollars over budget during the first half of the fiscal year, adding to signs of a brewing fiscal crisis in Albany.
According to the fro Read More
At mid-year, NY still far below most states in pandemic jobs recovery
New York has added private-sector jobs in all but three of the 38 months since the COVID-19 outbreak of March 2020—but the Empire State remains below its pre-pandemic employment level and continues to trail the national recovery.
On a seasonally adju Read More
Hospital Lobby’s TV Campaign Spreads Misinformation About Medicaid
As New York's health-care industry agitates for more money from the state budget, two of its most influential lobbying groups are airing TV ads that make alarmist and inaccurate claims about Medicaid. Read More
Hochul’s ‘Pay and Resolve’ Push for Hospitals Triggers Déjà Vu
Two years ago last week, I wrote in the Daily News about how then-Governor Andrew Cuomo was pushing a costly change to insurance law on behalf of a hospital group that had supported his campaign through a fund-rai Read More
The Looming Collapse of a Long-Term Care Insurer Raises Questions for DFS
As the Hochul administration presses for the creation of a "guaranty fund" to bail out failed health insurers, the state is quietly moving to seize a small company that could be the fund's first target. Read More
Hochul puts Medicaid spending on a steeper slope
Governor Hochul is releasing the brakes on Medicaid, allowing state spending on the safety-net health plan to increase more than twice as fast as it typically did during the Cuomo administration.
Read More
At end of ’22, NY still near bottom in pandemic recovery
The more time passes since the spring 2020 Covid-19 outbreak, the more New York stands out among all states for the weakness of its post-pandemic employment recovery.
As of December, seasonally adjusted private employment in New York was still nearly 2 Read More