capital-1-pic-copy-150x150-1108330New York State’s fiscal outlook has deteriorated in the past four months, based on an initial look at the financial plan update released late today by Governor Andrew Cuomo’s Division of the Budget (DOB).

Tax receipts for the 2017 state fiscal year, which ended March 31, came in $601 million below the estimates in the governor’s February plan, according to today’s DOB report, which updates financial projections based on the enacted budget deal Cuomo finalized with the Legislature in early April.

For fiscal 2018, the tax estimate has been reduced by $1.5 billion, including a $1.3 billion decrease in projected personal income tax (PIT) revenue.

Meanwhile, the final 2018 budget deal added $547 million in spending beyond what Cuomo had proposed, while rejecting $171 million in tax and fee increases he had sought.

That all left the governor with a $2.2 billion hole to fill for the new fiscal year. To close it, the plan shows, he made a series of spending re-estimates and fund transfers—most notably peeling another $461 million from a fat stack of more than $10 billion in windfall cash he’s collected since 2014, thanks to a series of monetary settlements with banks found to have violated various state laws.  (Indeed, another $350 million check just arrived in Albany’s coffers—too late to be noted in today’s report.)

This will bring to $1.3 billion the amount of non-recurring windfall money that Cuomo has used to at least temporarily offset recurring operating expenses over the past four fiscal years, according to a table included in the financial plan update.

Trend drivers

So, what explains the drop in projected tax revenues? Regarding the change in the PIT outlook, the Enacted Budget Financial Plan says “taxpayers and employers appear to have been anticipating that the Federal government will lower personal income tax rates in 2017, prompting a shift of capital gains from 2016 to 2017” to an extent greater than DOB anticipated in the Executive Budget plan. (Sort of a Trump bump reverberation, in other words, although expectations of a federal tax reform plan anytime soon have been dampened quite a bit in the past few weeks.)

Projected state business taxes are down $237 million because “it appears that taxpayers responded to the State corporate tax reforms enacted in 2014 by overpaying their tax liability in calendar year 2015 to avoid future penalties, and are now reconciling the amounts owed by reducing payments in calendar years 2016 and 2017,” the plan says.

Cuomo’s fund shifts and re-estimates reduced the net impact of the budget deal to a small net increase of $72 million in fiscal 2018, compared to the February financial plan. But compared to the February plan, projections of added spending have grown $776 million in 2019, $1.1 billion in 2020 and $1.2 billion in 2021.

The bottom line result of these changes are projected gaps of $4 billion in 2019, to $5.6 billion in 2020, to $7.5 billion in 2021—much larger than those projected in the February update.

Even if Cuomo holds (officially reported) spending growth to 2 percent, today’s financial plan update indicates the state will face a $791 million budget gap for fiscal 2019, the governor’s next election-year budget. That’s still a manageable amount by historical standards, but it means he will have to work harder (or resort to more budget accounting gimmicks) to hold spending below revenues in his election-year budget.

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

The Health Department’s response to a FOIL request for nursing home data triggers 2020 déjà vu

Despite Governor Hochul's promise of transparency, the Health Department keeps responding to requests for COVID data with tactics from the Cuomo administration Read More

How Are the Billions in Emergency Aid to New York Being Spent?

A new  posted yesterday on the Comptroller’s website could become the lens through which New Yorkers see how tens of billions of dollars in one-shot federal funding is being spent by governm Read More

Hochul’s Emergency Order Imposes Insurer Restrictions Sought by Hospital Group

Buried in Governor Hochul's emergency order on health-care staffing is a temporary bar against insurance companies challenging claims submitted by hospitals–and an influential hospital association is taking credit. Read More

Home Care Agencies Project Widespread Staffing Shortages in the Next Phase of New York’s Vaccine Mandate

Agencies providing home-based care to elderly and disabled New Yorkers face a large-scale loss of employees when the next phase of the state's vaccine mandate takes effect on Oct. 7, according to a newly released industry s Read More

Remembering the scandal that brought down Health Commissioner Howard Zucker

The resignation of Dr. Howard Zucker as state health commissioner marks the end of a term marred by scandal over his role in managing the coronavirus pandemic. The much-debated compelling nursing homes to admit COVID-positive patients, though it origi Read More

As leaves turn, NY’s post-pandemic recovery still has very far to go

Entering the second autumn since the COVID-19 outbreak of March 2020, the pace of New York State's pandemic economic recovery has been abysmal by almost any standard. New York was the national epicenter of the pandemic, and Governor Cuomo's "" business Read More

More NY job gains in August—but employment needs to rise a lot further

New York's jobs report for August looked relatively strong—but only by comparison, that is, with . On a seasonally adjusted basis, New York gained 28,000 private-sector jobs last month—a growth rate of 0.4 percent, according to . This was double th Read More

Projected PIT Haul Brightens State Budget Office’s Fiscal Forecast 

Stronger than expected tax payments this spring led the Governor’s Division of the Budget (DOB) to increase its personal income tax (PIT) revenue projections for the next four years by $8.5 billion above its April pr Read More


Sign up to receive updates about Empire Center research, news and events in your email.


Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries:

Press Inquiries:


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!