DiNapoli: Disappointing December Could
Mean Even More Serious Problems for State
The economic slowdown continues to significantly impact state finances, according to reports released today by State Comptroller Thomas P. DiNapoli examining state finances for December and the third quarter of state fiscal year 2008-09. Because December marks the end of the state’s third quarter, it is a significant month for tax collections although the reports show that actual collections were weak.
“December is typically a big month for state tax collections,” DiNapoli said. “Shoppers buy holiday gifts and businesses pay quarterly payments. But this December, shoppers weren’t buying as much and business tax collections were weak. The Governor and the Division of the Budget projected a difficult fourth quarter and these numbers support that projection.
“The sky hasn’t fallen yet, but ‘yet’ is a very big word. The Governor’s budget is on the table. We have to use this crisis as an opportunity to fix what’s been broken for so long. And we have to learn to live within the parameters of what the state can afford.”
The projections noted in the reports are based on the Governor’s updated Financial Plan issued on December 16, when he released the state fiscal year 2009-10 Executive Budget.
Findings from the reports include:
- In the General Fund, total revenues, including transfers, were $38.2 billion, $72.6 million below projections through December 31 but 7.5 percent, or $2.7 billion, above last year for the same period.
- Growth in Personal Income Tax collections continues to slow, but collections are still $114.8 million over projections and $2.3 billion over the same period last year, primarily due to estimated taxes collected in April on 2007 liabilities.
- Collections for consumption/use taxes, including sales tax ($95.1 million) and business taxes ($12.9 million) were below projections.
- General Fund disbursements, including transfers, totaled $39.2 billion, $122.6 million over projections through December 31 and $2.3 billion, or 6.3 percent, over last year.
- School aid expenditures are up $1.3 billion and Medicaid is also up $786 million over last year.
- The state spent $122.6 million more than estimated because State Operations and General State charges were $138.4 million over projections. In addition, support for Debt Service and State Capital Projects were $75.2 million over estimates. However, the state spent less than anticipated for local assistance grants.
- As a result of lower than anticipated revenues and higher than anticipated spending through December 31, the General Fund closing balance was $1.7 billion, $195.2 million below what the Division of the Budget projected for the fiscal year through December.
All Governmental Funds
- All Funds spending was $88.2 billion, approximately $591 million below projections through December 31, primarily due to lower than anticipated spending for local assistance programs ($489 million below plan) in addition to lower than anticipated spending for General State Charges ($93.3 million) and capital projects ($50.5 million).
- All Funds spending was $5.1 billion, or 6.2 percent, higher than the same period from State Fiscal Year 2007-08, primarily due to growth in spending for education, Medicaid, health and environment programs.
All Funds revenues were $85 billion through December 31, $394.7 million below projections. The variance is primarily from lower than anticipated federal receipts ($228.4 million) and miscellaneous receipts ($181.9 million).
- All Funds tax collections through December were $45.4 billion in All Governmental Funds, $15.6 million higher than anticipated and $2.7 billion over last year.
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 the December 2008 Cash Report.
Click here for a copy of the report examing third quarter state revenues.