DiNapoli Announces Year-end Results
for State Fiscal Year 2008-09
State Comptroller Thomas P. DiNapoli today reported that New York State finished the State Fiscal Year (SFY) 2008-09 with a General Fund balance of $1.9 billion, which was $434.5 million more than was anticipated in the Financial Plan, primarily due to the receipt of $1.8 billion in federal stimulus funds.
Because of the deteriorating economy, projected total tax collections were lowered by $3.6 billion throughout the fiscal year. The State Financial Plan, updated in January, anticipated total tax collections of $60.8 billion. However, the state still ended the year $448.4 million below January projections and $533.2 million below total collections from SFY 2007-08.
“New York State has not seen such a dramatic decline in state revenues since 2001,” said DiNapoli. “The federal stimulus package and actions of the Governor and Legislature eased some of the pain last year. But the state did not end the year in a strong enough position to address continuing problems. The state must spend with caution and be prepared to act decisively if the financial picture does not improve. We don’t know how long this downturn will last, but we need to reform how we do things. New York State must stop spending more than it takes in or the state cannot achieve long-term fiscal stability.”
Year-end findings include:
- All Governmental Funds spending totaled $121.6 billion, a $5.5 billion or 4.8 percent increase over SFY 2007-08. All Governmental Funds receipts, including stimulus funds, were $119.2 billion, an increase of $3.8 billion or 3.3 percent over the prior year.
- All Governmental Funds spending was $1.8 billion over projections in the January Financial Plan, primarily due to local assistance spending ($2.5 billion over Plan) and State Operations ($294.8 million). The variance in local assistance is largely associated with the federal stimulus that was not included in the January Financial Plan, higher than anticipated costs for Medicaid, and various social service programs. This higher than anticipated spending was offset by lower than anticipated spending for capital needs ($719.8 million), debt service ($84.3 million) and General State Charges ($136.7 million).
- All Governmental Funds receipts were nearly $2.8 billion over projections, again primarily due to federal stimulus funds. Total tax collections were $448.3 million below January Plan projections but were offset by higher Federal receipts ($2.9 billion) and Miscellaneous Receipts ($355.1 million).
- All Governmental Funds tax collections ended the year $533.2 million below total collections from SFY 2007-08, primarily because of lower business taxes ($626.4 million) and other taxes ($193.7 million). Business tax declines were primarily associated with Corporate Franchise taxes (down $777.1 million) and other tax declines were primarily due to lower collections from the Real Estate Transfer tax (down $319.5 million). These declines were offset by growth in Personal Income Tax of $276 million, although this increase reflects collections from last April on 2007 tax liabilities. Withholding, the largest component of Personal Income Tax, ended the year $754.2 million below SFY 2007-08 levels. Consumption taxes ended the year basically level, although sales tax collections fell $310.7 million or 2.8 percent.
- The General Fund closed the 2008-09 fiscal year at $1.9 billion, which was $434.5 million more than was anticipated in the Executive’s updated January Financial Plan, but $805.5 million below the closing balance for SFY 2007-08. The General Fund balance of $1.9 billion is comprised of $576.7 million in the Refund Reserve Account, $1.031 billion in the Tax Stabilization Reserve Fund, $21 million in the Contingency Reserve Fund, $144.8 million in the Community Projects Fund and $175 million in the Rainy Day Reserve Fund.
- General Fund spending, including transfers to other funds, was $769.5 million less than planned, again primarily due to federal stimulus funds that had the effect of lowering General Fund spending (actual spending did not decline but was transferred to other funds). Local Assistance payments were $1.2 billion below Plan projections and State Operations were $40.7 million below projections.
- General Fund spending, including transfers to other funds, totaled $54.6 billion, a $1.2 billion or 2.3 percent increase over fiscal year 2007-08.
- General Fund receipts, including transfers from other funds, totaled $53.8 billion, a $705 million or 1.3 percent increase over the prior year indicating an operating deficit of $805 million. However, as a result of the receipt of $1.8 billion in federal stimulus funds, of which $440 million were disbursed to localities and $1.3 billion was used to lower General Fund spending, the General Fund ended the year in balance. Although personal income tax receipts were $124 million above Financial Plan estimates, consumption taxes were $256.9 million lower than anticipated. Business taxes and other taxes were below Plan by $88.7 million and $79.6 million respectively.
The state’s finances are generally broken down by two main categories: General Fund and All Funds. The General Fund is the major operating fund of the state and accounts for all receipts that are not required by law to be deposited into another fund. All Governmental Funds includes General, Special Revenue, Debt Service and Capital Projects funds, as well as funds from the federal government.
Click here for a copy of the Year-End Cash report.