Governor David Paterson is right on the money in calling for “bold and aggressive action to reduce state spending” to deal with the severe and worsening fiscal crisis detailed in today’s Mid-Year Budget Update.  At this point, after months of dire warnings, there’s hardly anything the governor can say that would make the problem sound worse than it is.  But touting a “$47 billion budget deficit over the next four years,” as is done in the headline of the governor’s accompanying press release, doesn’t really do much to illuminate the issue.

That $47 billion figure represents the cumulative totals of projected budget gaps from now through fiscal 2011-12 — i.e., adding $1.5 billion, plus $12.5 billion, plus $15.8 billion, plus $17.3 billion.  But the state can’t simply roll over its budget gaps from one year to the next.  To the extent it closes next year’s projected gap with recurring savings, those future gaps will be reduced as well.  So that “$47 billion deficit” boils down to nothing more or less than a really scary number — the kind of number that jumps out and screams “Boo” at anyone who isn’t already paying attention.

As the fiscal crisis unfolds, the most important numbers to track are these:

  • $1.5 billion, which is the amount by which Paterson says receipts will fall short of disbursements in the current fiscal year, which ends March 31.
  • $2 billion, which is the governor’s savings target for the Nov. 16 special session.  Real, permanent spending reductions with a value of $2 billion during the last quarter of this fiscal year would represent a big head start in dealing with the much larger problem ahead.
  • $12.5 billion, which is the size of the gap between projected receipts and expenditures in the 2009-10 budget, before subtracting the full-year value of any budget reductions enacted in November.

Next year’s budget shortfall stems in almost equal measures from (a) a further drop in receipts and (b) a projected 12 percent increase in baseline spending, including a “current law” hike of $2.2 billion (10 percent) in school aid.

Obviously, none of that baseline spending increase can or should be allowed to go forward.  What’s left to cut — really cut — amounts to roughly 11 percent of the state’s current general fund budget.  Which is plenty.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

Another Hochul To-Do: Timely Financial Reporting

The state will spend a record $212 billion in the current 2022 Fiscal Year, under the budget its elected leaders adopted in April. Read More

Health Research Inc. Turns Over its Payroll Records Despite Claiming To Be Exempt from FOIL

The full payroll records of more than 2,400 de facto state employees are available to the public for the first time after being released by Health Research Inc. Read More

Emergency Billions Pose Opportunity—and Risk—for NYS Schools

New York schools are to post publicly today plans for spending a huge pile of unexpected and unbudgeted cash. Read More

New York’s Medicaid Rolls Kept Pace with a Nationwide Surge During the Pandemic

New York's Medicaid and Child Health Plus programs added three-quarters of a million enrollees during the coronavirus pandemic, roughly matching the pace of a national surge in sign-ups. Read More

New York’s Hospital Industry Ranks Near the Bottom of Two Quality Report Cards

New York's hospitals remain near the bottom of two quality report cards. The state's hospitals received the lowest rate of any state except Nevada and DC. Read More

New York’s Medicaid and Public Health Crises Get Short Shrift in the New State Budget

In spite of an ongoing pandemic and spiraling Medicaid costs, New York's health-care system received surprisingly little attention in the new state budget. On issue after issue, law Read More

Schumer’s First Spending Bill as Majority Leader Tailors Money for New York Medicaid

The pandemic relief bill includes a boost in Medicaid funding that appears to be tailor-made for Senate Majority Leader Chuck Schumer. Read More

A Letter From Washington Shrinks New York’s Budget Gap by $2 Billion or More

In a letter to governors two days after President Biden's inauguration, the U.S. Department of Health and Human Services said that the pandemic-related federal public health emergency "will likely remain in place for the entirety of 2021." 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

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@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.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!