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July 19, 2010

DiNapoli Releases June Cash Report

Need for Caution Persists


For only the second time in modern history, the state General Fund ended the first quarter of the fiscal year with a negative balance, according to the June Cash Report released by State Comptroller Thomas P. DiNapoli. The state ended the quarter $87.1 million in the red. While tax collections improved from the same period last year, available cash was limited because of $2.9 billion in delayed payments and refunds from 2009-10 that were made in the first quarter.

“There are some positive signs,” DiNapoli said. “But three and a half months into the state fiscal year the budget still isn’t fully done and there’s no financial plan. Most budget bills have been passed but many revenues are from problematic and non-recurring resources. And nothing has been done to reform the budget process.

“There are fiscal storm clouds rolling in. The next school aid payments are due in September, and New York’s cash umbrella may not be big enough. The state could, once again, be seriously in the red. Final action on a complete budget is needed and we must continue to closely monitor spending and revenues.”

DiNapoli’s report found:

REVENUES

  • Through June 30, General Fund receipts, including transfers from other funds, were $12.7 billion, $15.3 million or 0.1 percent below the same period last year, primarily because of collections of miscellaneous receipts and transfers from other funds.
  • Total General Fund tax collections through June 30 were $9.4 billion, up $271.7 million, or 3 percent, from last year. When adjusted for non-recurring actions, tax collections were 13.3 percent higher than collections from the first quarter last year.
  • Year-to-date unadjusted General Fund Personal Income Tax collections were $6 billion, $348 million or 6.1 percent above last year. Withholding collections, the General Fund’s largest revenue source, increased 11.9 percent from the same period last year.
  • Year-to-date General Fund consumption tax collections, including sales taxes, were $2.1 billion, $118.9 million or 6 percent above collections from the same period last year. Sales tax collections were $1.9 billion, $111.4 million or 6.1 percent more than last year.
  • Year-to-date General Fund business tax collections were $977.5 million, $262.8 million less than collections for the same period last year, primarily due to unusually large collections for bank taxes in June 2009. Miscellaneous receipts were $441.6 million, $107.7 million below collections from last year.
  • All Governmental Funds receipts through June 30 were $30.2 billion, $1.9 billion or 6.7 percent more than last year for the same period, primarily due to federal receipts (up $1.5 billion) and tax collections (up $534.3 million). However, collections also include such things as the Metropolitan Transportation Authority’s commuter tax, Taxicab medallion user tax, an additional auto rental tax as well as collections associated with various tax increases which were not collected last year. In addition, non-recurring actions including refunds paid this year and a payment from New York City last year.
  • Total unadjusted tax collections were $14.3 billion, up $534.3 million, or 3.9 percent, from last year, which again reflects not only normal growth, but also new collections from the Metropolitan Transportation Authority’s Commuter tax and Taxicab medallion user tax and the non-recurring actions previously described. Federal receipts increased by $1.5 billion from last year. Miscellaneous receipts through June 30 were $4.9 billion, $126.1 million less than collections for the same period last year, primarily reflecting the timing of collections and non-recurring resources collected last year that have not occurred this year.

SPENDING

  • General Fund spending, including transfers to other funds, was $15 billion, $1.5 billion or 10.7 percent more than last year through June 30. The increase in spending was primarily due to costs for Medicaid (up $1.2 billion due to a variety of reasons including delayed payments, increased utilization and costs and increased costs associated with the state cap on local Medicaid costs) and education (up $991.3 million primarily due to the delayed March 2010 school aid payment that was paid in June). These increases were partially offset by declines in non-personal services spending (down $161.6 million), health and environment (down $156.3 million primarily due to the Federal Government decision to retroactively apply higher FMAP rates for pharmaceutical costs resulting in a temporary suspension of state payments for Medicaid Part D clawback) and other social services (down $143.8 million primarily due to the timing of payments).
  • All Governmental Funds spending through June 30 was $31.5 billion, $2.1 billion or 7 percent more than last year for the same period, primarily due to increases in Medicaid ($2.2 billion) and education ($1.6 billion). These increases were partially offset by lower spending in other social services (down $550.3 million) and general state charges ($402.4 million).

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.

The monthly cash report does not make comparisons to the latest available financial plan that was released in February. Making such comparisons would be misleading because they would not take into account the Executive’s actions to cash manage state funds while budget enactment is delayed or any other necessary financial plan revisions.

For a copy of the June 2010 Cash Report click here or visit: http://www.osc.state.ny.us/finance/finreports/cash/monthly/june10.pdf

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