State revenues sinking deeper?

by E.J. McMahon |  | NY Torch

New York State’s budget gap through fiscal 2018-19 could be a whopping $4.6 billion worse than indicated by Governor Cuomo’s latest Division of the Budget (DOB) projections, according to new estimates from State Comptroller Thomas DiNapoli.

Compared to the numbers in the DOB’s August financial plan update, the comptroller’s staff projects that state operating funds receipts will be a net $1.8 billion lower in the current fiscal year, which ends March 31, and $2.8 billion lower in 2018-19. The shortfall is concentrated in the category of personal income tax receipts, which will fall below DOB’s August estimates by $1.7 billion in 2017-18 and $2.5 billion lower in 2018-19, respectively, according to the comptroller’s report. This follows recent weakness in PIT collections, as reflected in the comptroller’s recent mid-year update.

Using a current-law baseline measure, the state budget gap for fiscal 2018-19 alone was last projected by DOB at $4 billion, a figure the governor himself began citing recently (without further explanation) in his recent warnings about the implications of federal health care spending cuts.

By that measure, the comptroller’s new estimate boosts the shortfall to $6.8 billion, by far the biggest prospective blob of red ink on Albany’s books since Cuomo took office. Adding this year’s shortfall would boost the total gap to $8.6 billion.

Assuming Cuomo continues to hold spending growth to 2 percent a year, DOB was projecting a balanced budget for the current year, followed by a 2018-19 gap of $841 million. Even by that more favorable measure, the comptroller’s estimate indicates the gap has grown to the daunting level of $5.4 billion, equivalent to nearly 6 percent of total state operating funds spending.

The sinking revenue numbers further highlight the governor’s annual failure to meet the deadline for issuing a mid-year state financial plan update, which was due Oct. 31. Section 23.5 of State Finance Law also required the governor, comptroller and the legislative majorities to “separately prepare and make available reports on estimated state receipts and state disbursements for the current and ensuing fiscal years” by Nov. 5. The comptroller once again was the only official to meet that deadline, filing his report on Friday.

By Nov. 15—a week from tomorrow—representatives of the governor, comptroller and all four legislative leaders are required to meet publicly “for the purpose of jointly reviewing available financial information to facilitate timely adoption of a budget for the next fiscal year.” That didn’t happen last year, either.

Stay tuned.

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- E.J. McMahon is the Research Director at the Empire Center for Public Policy.