A report released today by Comptroller Tom Dinapoli as part of the state’s Quick Start budget process projects a slight shortfall this year, and bigger deficits down the line.
“The current year enacted budget made positive strides in addressing the ongoing structural deficit,” Mr. DiNapoli said. “However, we still face challenges and risks and there is much that could undermine some of the good work of the last year. Fiscal pressures – particularly on the revenue side – pose a significant challenge, and achieving balance will require an ongoing commitment by state leaders to live within our means.”
Over the three-year forecast period, Mr. DiNapoli estimates that revenue and spending could deviate from current estimates by more than $1.5 billion.
The report notes that some efforts to reduce future spending may not be as effective as projected and that issues like global market volatility, lower Wall Street employment and income, high state unemployment and the struggling housing market continue to pose budget risks.
Mr. DiNapoli warned that this year’s revenue collections are currently below Financial Plan projections and may be slow to bounce back due to the state’s reliance on revenue related to employment and consumption.
Further findings from the report are below:
· Current projections in the First Quarterly Update to the SFY 2011-12 Enacted Budget Financial Plan, released in August, remain too optimistic for both spending and tax revenue.
· The Comptroller’s report projects that All Funds spending could be $97 million higher than current Financial Plan estimates; even taking into account the spending limits enacted in the 2011-12 Budget for Medicaid and school aid. All Funds receipts are estimated to be $214 million lower than currently anticipated in the Financial Plan.
· The Comptroller’s report projects that All Funds spending in 2012-13 could be $82 million higher than current Financial Plan estimates; All Funds receipts are estimated to be $546 million lower than currently anticipated in the Financial Plan.
· The Comptroller’s report projects that All Funds spending in 2013-14 could be $75 million higher than current Financial Plan estimates; All Funds receipts are estimated to be $195 million lower than currently anticipated in the Financial Plan.
· While more than 75 percent of the actions taken to reduce the 2011-12 budget gap were intended to be recurring, there is risk that the level of savings anticipated could be difficult to achieve. However, given the enactment of spending limitations in Medicaid and school aid, the most significant risk to the Financial Plan relates to tax collections.
