The state budget poised for adoption would spend about $1 billion more than it takes in, unofficial budget records indicate.
The fiscal 2024 spending plan anticipates $126.7 billion in state operating funds receipts, but would spend $127.7 billion, or $973 million more.
To make the books balance, the governor and Legislature appear to be using a portion of the state’s fund balance, or unallocated cash.
Spending fund balance isn’t a problem on its own, but it sets the state up for a mismatch between revenues and expenditures in future years.
Even before acceding to the Legislature’s demands for higher spending, Governor Hochul’s budget division in March forecast a budget gap of more than $5 billion in fiscal 2025 (which begins in 11 months), and total gaps of almost $21 billion in fiscal 2025, 2026, and 2027. The use of fund balance this year, presumably on recurring expenses, risks widening those gaps. And it leaves the state with $1 billion less with which to fill them in the event of an economic downturn.
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