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March 17, 2010

DiNapoli Warns of Potential State Cash Shortfall

New York State Comptroller Thomas P. DiNapoli said that with less than one month remaining in the 2009-10 fiscal year, revenue collections are unlikely to meet year-end projections, increasing next year’s deficit and causing a cash flow shortage in the first quarter of the next fiscal year.

“This year’s budget was seriously flawed,” DiNapoli said. “It was based on overly optimistic revenue assumptions and temporary revenue sources that pushed the problem into the future. The last thing New Yorkers need is a replay of that buy-time budget. New York must deal with fiscal realities.

“The Governor and legislative leaders have reached consensus on revenue. But it’s alarming that discussions have already begun to focus on more state borrowing, before any real negotiations have begun. New York already has too much debt. More borrowing would become part of the problem, not the solution.”

The DiNapoli monthly cash report found:


  • Through February 28, General Fund receipts, including transfers from other funds, were $45.2 billion, $232.4 million above Financial Plan projections, but $3 billion lower than for the same period last year.
  • Total General Fund tax collections through February 28 totaled $32.7 billion, down $2.2 billion, or 6.3 percent, from last year but $56.4 million above projections for the first 11 months of the fiscal year.
  • Year-to-date General Fund Personal Income Tax collections were $20.8 billion, roughly $167.2 million above projections updated in February, $1.2 billion less than last year.
  • Year-to-date General Fund consumption tax collections, including sales taxes ,were $7.4 billion, $287.5 million below collections from the same period last year and $1.2 million above projections. Sales tax collections were $6.7 billion, $317.4 million or 4.5 percent lower than last year.
  • Year-to-date General Fund business tax collections were $3.7 billion, $332.8 million lower than collections for the same period last year, and $90.2 million below Financial Plan projections through the first 11 months. Miscellaneous receipts were $2.8 billion, $237.8 million above collections from last year, and $39.2 million higher than projected. This includes $601.8 million collected from utilities from the temporary utility surcharge enacted in the 2009-10 budget.
  • The franchise fee associated with the Aqueduct Race Track ($300 million) that was anticipated in the February Financial Plan update has not been received. The February Annual Information Statement Supplement issued March 2 states that this transaction is now expected to occur in the second half of SFY 2010-11.
  • Through February 28, the State had collected only $13.5 million in Tax Amnesty receipts as enacted in the December 2009 Deficit Reduction Plan. The Financial Plan assumes $250 million will be collected by March 31.
  • All Governmental Funds receipts through February 28 were $112.5 billion, $89.4 million above projections and nearly $7 billion higher than last year for the same period, primarily due to federal receipts.
  • Total tax collections were $52.7 billion, down $3 billion, or 5.4 percent, from last year and $128.8 million above projections. Federal receipts increased by nearly $7.4 billion from last year, but were $122.8 million lower than projected. Miscellaneous receipts through the first 11 months were $19.4 billion, $2.6 billion higher than collections for the same period last year, primarily due to the receipt of public authorities’ bond proceeds to reimburse the state for capital spending that has already occurred and $601.8 million in new utility assessment revenue. Miscellaneous receipts were $83.4 million higher than projected.


  • General Fund spending, including transfers to other funds, was $42.7 billion, $2.7 billion, or 6.1 percent, less than last year through February 28. The decline in spending was mostly due to costs for General State Charges (down $435.5 million primarily due to the timing of payments), non-personal service (down $247.3 million ― reflecting the 10 percent spending cut by State Agencies, as directed by the Executive) and Medicaid (down $2.1 billion – reflecting federal stimulus Medicaid payments made from other funds as well as the timing of certain payments). These declines were offset by increases in education spending (up $212 million) and other health and environment spending (up $272.1 million). Including transfers, General Fund spending was $663.4 million below projections.
  • All Governmental Funds spending through February 28 was $109.1 billion, $5.0 billion, or 4.8 percent, more than last year for the same period, primarily due to increases in Medicaid spending ($4.7 billion or 15.4 percent), transportation ($710.3 million or 21.1 percent) and education ($869.3 million or 3.7 percent). These increases were offset by lower spending for general state charges ($821.4 million), non-personal service spending ($445 million) and health and environment spending (down $176.3 million). All Funds spending was $1.7 billion 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.




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