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April 29, 2013

DiNapoli: State Ends Fiscal Year in Solid Position But Challenges Remain

Despite unexpected costs from Superstorm Sandy and a weaker than expected economy, New York State ended state fiscal year (SFY) 2012-13 in a stable cash position compared to recent years, according to an end of the year report released today by New York State Comptroller Thomas P. DiNapoli.

“New York State endured significant challenges last year, including the second most expensive storm in American history, but was able to close the books with a slightly higher balance than expected in the latest projections,” DiNapoli said. “The spending restraint shown in recent budgets has helped to keep the state in the black. Nevertheless, tax revenue has fallen short of initial projections for six years in a row. While we have benefitted in the short run from a number of non-recurring revenues, relying on such resources does not bode well for the long-run.”

Tax collections ended the year at $66.3 billion, $378.2 million higher than February projections but $70 million below initial projections. Overall, tax collections increased by $2 billion, or 3.1 percent, from SFY 2011-12 results, primarily because of stronger than anticipated personal income tax (PIT) collections in December and January. Federal tax law changes prompted many high income earners to accelerate income as well as investment returns into 2012 to avoid paying higher taxes. While PIT collections ended the year 3.8 percent higher than last year, growth through Nov. 30 was only 0.6 percent.

All Funds spending of $133.1 billion was $2.5 billion lower than February projections largely because of the timing of spending related to disaster assistance for Superstorm Sandy that was originally planned for March 2013. In addition, spending for capital projects, often subject to timing issues, was $242.8 million lower than anticipated. The SFY 2013-14 enacted budget financial plan expected to be released soon should provide information on how much of this reflects timing as opposed to lower-than-anticipated spending.

The General Fund ended SFY 2012-13 with a balance of $1.61 billion. This was $176.7 million less than the balance in SFY 2011-12, and $136 million more than projected in the last financial plan update. The General Fund closing balance includes $190.2 million in unrestricted reserves and $1.4 billion in restricted reserves including the Tax Stabilization Reserve Fund and the Rainy Day Fund.

DiNapoli also released the March 2013 Cash Report, which found:

  • General Fund receipts (including transfers from other funds) of $58.8 billion through March were 3.3 percent, or $1.9 billion, higher than receipts from the same period last year. This was $281.1 million lower than the latest financial plan projections and $119.1 million lower than initial projections.
  • General Fund tax collections totaled $43.3 billion, an increase of $1.5 billion, or 3.7 percent, from a year ago, $234.9 million higher than the latest projections and $87.1 million lower than initial projections.
  • General Fund PIT collections through March totaled $26.9 billion, up 4 percent, or $1 billion from last year. Collections were $65.9 million higher than the latest projections and $32.1 million lower than initial projections. The growth largely reflects increased collections associated with the fiscal cliff and federal tax actions.
  • General Fund business tax collections totaled $6.3 billion through March, which was $492.3 million, or 8.5 percent, more than last year. The figure was $214.5 million higher than February projections as well as initial projections.
  • General Fund sales tax collections grew $77.6 million, or 0.9 percent, through March, compared to the same period last year. This is slightly less than the latest projection of 1.1 percent for year-end growth but lower than the initial growth projection of 2.6 percent.
  • All Funds tax collections of $66.3 billion increased by 3.1 percent, or $2 billion, from last year, primarily from PIT collections (up $1.5 billion or 3.8 percent) and business tax collections (up $585.5 million or 7.4 percent). All Funds tax collections were $378.2 million higher than current projections but $69.8 million lower than initial projections.
  • General Fund spending (including transfers to other funds) of just under $59 billion increased 4.4 percent, or $2.5 billion, from the same period last year. General Fund spending was $417.4 million below the latest projections and $89.6 million higher than initial projections. Local assistance increased $1.3 billion, or 3.5 percent. General state charges declined $170 million from last year, primarily due to the timing of payments. Departmental operations spending increased $361.7 million, or 4.8 percent, compared to last year for the same period.
  • All Funds spending declined 0.3 percent, or $407.1 million, compared to last year, primarily due to $1.1 billion in reduced spending for local assistance and offset by higher spending for departmental operations (up 0.8 percent or $161.2 million), debt service (up $273.9 million or 4.7 percent) and capital (up $395.7 million or 7.5 percent). All Funds spending was $2.5 billion lower than the latest projections and $296.2 million lower than initial projections.

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 Funds includes general, special revenue, debt service and capital projects funds, as well as funds from the federal government.

Click here for the report examining SFY 2012-13 Year End Results: http://www.osc.state.ny.us/reports/budget/2013/2013_Year_End_FY1213.pdf

Click here for a copy of the March 2013 Cash Report, which includes a full breakdown of all revenue and spending for the month and year-to-date: http://www.osc.state.ny.us/finance/finreports/cash/monthly/march13.pdf

State Fiscal Year 2012-13 Results
(in millions of dollars)

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