March 18, 2009
DiNapoli: State Tax Revenues Significantly Down
The state’s tax revenues declined significantly in February, State Comptroller Thomas P. DiNapoli said today. Monthly business tax receipts were down 66 percent in February compared to last February, while personal income taxes dropped 23 percent during the same period.
“The state’s revenues are on a downward slope, and we expect the decline to continue,” DiNapoli said. “The federal stimulus will help the state deal with the tough economy we’re facing. But the stimulus money shouldn’t be used to avoid making tough budget decisions. We don’t know how long this downturn will last, but we do know that until New York State stops spending more than it takes in, the state cannot achieve long-term fiscal stability.”
With only one month left to go in the state fiscal year, year-to-date growth in spending of 4.5 percent ($45.4 billion) is higher than the 3.7 percent growth expected for the year by the state Division of the Budget (DOB) for the General Fund. However, DOB’s Financial Plan anticipates virtually zero growth in spending for March. In addition, although no federal stimulus money was received in February, the state has begun to receive these funds in March. The stimulus money may lower General Fund spending and may affect year-end fund balances.
Year-to-date growth in revenues of 1.5 percent ($48.3 billion) is lower than the 2 percent growth projected by DOB for the General Fund for year-end. However, DOB is projecting 19 percent revenue growth in March.
Other findings in the February 2009 Cash Report:
All Governmental Funds revenue of $105.5 billion grew $2 billion, or 1.9 percent, compared to the same 11-month period last year, reflecting growth in federal receipts (7 percent, or $2.2 billion) and personal income tax collections (2.5 percent or $854 million) but was offset by declines in business taxes (-11.5 percent or $752 million) and miscellaneous receipts collections (-1.5 percent or $262 million). The increase in federal funds does not include any Recovery Act funds pursuant to federal legislation that was enacted in February
All Governmental Funds spending through February 28 of $104.1 billion was $5.2 billion, or 5.2 percent, more than 2007-08 figures through February 28, 2008, reflecting growth in spending for education (4.8 percent or $1.1 billion), Medicaid (2.7 percent or $811 million) and State Operations (5.5 percent or $907 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.
Click here for a copy of the February 2009 Cash Report.