DiNapoli: State Revenues Fall in July
State revenues declined last month, according to the July Cash Report released today by State Comptroller Thomas P. DiNapoli. Total tax revenues of $11.5 billion were $52.6 million below projections and $3.6 billion lower than last year from April through July. While total personal income tax collections are down for the year, DiNapoli noted that personal income tax withholding collections, those tax collections that come straight from individuals’ paychecks, grew by $16 million in July for the second consecutive month this year.
“Although there were some small signs that the national economy is slowly turning around, economists project it will take longer for New York State to recover,” DiNapoli said. “The fact remains that state revenues continue to fall below financial estimates that were updated just two weeks. New York has a very real and growing current year deficit. The Governor and Legislature need to make some difficult choices that weren’t made in the Enacted State Budget. The state cannot afford to postpone these decisions. We must readjust our priorities to meet the economic crisis.”
The Division of the Budget (DOB) updated the state’s 2009-10 Financial Plan on July 30 to reflect first quarter results in revenue collections and spending as well as economic conditions. DOB lowered projections for total General Fund receipts for the year by approximately $2 billion. The July cash report reflects the lower updated projections.
Specific report findings:
- General Fund receipts, including transfers from other funds, through July 2009 of $15.7 billion were $190.9 million below Financial Plan projections released by DOB on July 30 and $4.8 billion lower than last year for the same period. The year-to-year variance is primarily because of lower personal income tax collections, particularly in April. General Fund Personal Income Tax collections of $7.3 billion were $3.3 billion below last year through July, primarily due to collections in April 2009, and $25.4 million below projections for the first four months. Year-to-date business tax collections of $1.3 billion were $181 million higher than collections for the same period last year, primarily due to higher than expected collections in June 2009 and $7.1 million below projections for the first four months. Miscellaneous receipts of $487 million were $176 million below collections from last year, which is $148.6 million lower than projected primarily due to the receipt of reimbursements used to offset certain General Fund costs.
- General Fund spending, including transfers to other funds, of $16.7 billion was $2.4 billion, or 12.5 percent, less than last year through July 31. The decline in spending was mostly due to costs for General State Charges (down $829.8 million primarily due to the timing of payments) and Medicaid (down $1.7 billion – reflecting federal stimulus Medicaid payments made from other
funds). These declines were offset by increases in education spending (up $648.5 million). In total, General Fund spending was $120.1 million below projections, although much of this variance is due to the timing of certain reimbursements used to offset General State Charges and State Operations spending.
- All Governmental Funds receipts through July 2009 of $37.2 billion were $360 million below projections and $1.7 billion lower than last year for the same period. Total tax collections of nearly $17.5 billion were down nearly $4.5 billion, or 20.3 percent, from last year and $78.6 million below projections. Federal receipts increased $1.9 billion from last year, which is $74.4 million lower than projected.
- All Governmental Funds spending through July 31 of $37.7 billion was $806.4 million, or 2.2 percent, more than last year for the same period, primarily due to increases in Medicaid spending ($1.2 billion or 10.9 percent), and education ($975.6 million or 12.4 percent). These increases were offset by lower spending for General State Charges ($905.8 million), transportation grants ($311.5 million) and other social services spending (down $247.1 million or 11.4 percent). All Funds spending was $411.2 million below projections.
The state’s finances are generally broken down by two main categories: General Fund and All Governmental 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. DiNapoli’s monthly cash report compares state finances against the same time period last year and the state’s current year Financial Plan.
Click here for a copy of the report.