DiNapoli Renews Call For Responsible Budget
Lack of Budget Contributing to Persistent Cash Crunch
Based on actual revenue and spending results for April, the first month of the 2010-11 fiscal year, New York State Comptroller Thomas P. DiNapoli reported today that revenue collections will likely be insufficient to meet scheduled payments. The State expects a cash flow shortfall by early June. To address this, the Division of the Budget has proposed language in the latest proposed budget extender bill package that would delay school aid payments.
“Doing nothing is not the answer,” DiNapoli said. “Inaction and temporary fixes have brought us to the point were the State cannot meet its required payments. If last year’s budget was a ‘buy-time budget,’ this year’s is just wasted time. We simply can’t afford to continue down this road. All this wasted time means New York will have to pack a whole year of fiscal pain into 10 months.”
DiNapoli noted that the lack of an Enacted Budget for 2010-11 means there is no current Financial Plan to track against actual spending and revenue, which over time can undermine fiscal discipline. DiNapoli said achieving the full-year fiscal benefit of savings and revenue proposals becomes more difficult the later into the fiscal year the budget delay goes, increasing the burden on school districts, local governments, not-for-profits and other affected entities.
Included in the April monthly report is a new schedule that presents the financial operating results for State Operating Funds that combines activity for the General Fund, State special revenue funds, and debt service funds. This new schedule is intended to measure the portion of the State budget that supports State operations and is financed by available State resources. State Operating Funds do not include those activities that are supported by federal grant revenues or capital projects funds.
DiNapoli said that while there are some positive signs in year-to-year Personal Income Tax revenue growth, the growth is deceptive because last year’s collections were low due to the impact of the recession. He warned that the economy was only in the early stages of recovery and uncertainties remain.
- Through April 30, General Fund receipts, including transfers from other funds, were $5.2 billion, $393.5 million more than the same period last year.
- Total General Fund tax collections through April 30 totaled $3.9 billion, up $304.8 million, or 8.5 percent, from last year for the first month of the fiscal year.
- Year-to-date General Fund Personal Income Tax collections were $3.1 billion, $202.6 million or 7.1 percent above last year. (Note: Personal Income Tax receipts also include $500 million in additional refunds that were delayed from the SFY 2009-10 fiscal year, artificially reducing growth. If refunds had not been delayed, receipts would have finished the month over 20 percent higher than April 2009.)
- Year-to-date General Fund consumption tax collections, including sales taxes, were $669.3 million, $60.7 million above collections from the same period last year.
- Year-to-date General Fund business tax collections were $60.2 million, $0.8 million lower than collections for the same period last year. Miscellaneous receipts were $90.2 million, $3.0 million below collections from last year. (Note: Department of Motor Vehicle and Alcoholic Beverage Control fees were reclassified as miscellaneous receipts. They are counted as consumption taxes in the last financial plan. Collections for these were $46 million more than April 2009 collections).
- All Governmental Funds receipts through April 30 were $11.0 billion, $1.4 billion higher than last year for the same period, primarily due to federal receipts.
- Total tax collections were $5.6 billion, up $551.5 million, or 10.9 percent, from last year. Federal receipts increased by $855.4 million from last year. Miscellaneous receipts through the first month were $1.5 billion, $1.0 million higher than collections for the same period last year.
- General Fund spending, including transfers to other funds, was $3.2 billion, $728.2 million or 18.3 percent less than last year through April 30. The decline in spending was mostly due to costs for personal service (down $233.2 million), General State Charges (down $264.3 million primarily due to the timing of payments), and education (down $145.6 billion). These declines were offset by increases in Medicaid spending (up $269.0 million).
- All Governmental Funds spending through April 30 was $8.5 billion, $325.8 billion, or 4.0 percent, more than last year for the same period, primarily due to increases in Medicaid spending ($694.8 billion or 21.5 percent), and transportation ($195.3 million). These increases were offset by lower spending for general state charges ($315.1 million) and personal service spending ($273.8 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.
Click here for a copy of the April 2009 Cash Report.