DiNapoli Warns Against Fixing Budget With Gimmicks or Debt
Report: Failure to Balance Budget Will Result in Dangerous Cash Crunch
New York State Comptroller Thomas P. DiNapoli today released a report on New York’s cash position and urged the State Legislature to balance the current year spending plan without resorting to fiscal gimmicks or debt, which would only push the State’s budget problems into the future at a higher cost to taxpayers. DiNapoli’s report indicates the State’s General Fund may face a $1.4 billion cash deficit next month if corrective action is deferred further.
“The fact is that revenue that was hoped for has not materialized and unless spending cuts are made, the State will have a significant cash deficit next month,” DiNapoli said. “New Yorkers understand difficult spending choices must be made – they’ve been making them in their households over the course of the recession. They get it. New York taxpayers need the Governor and the Legislature to close the deficit and put our fiscal house back in order. We can’t afford further delay, and we can’t afford to fall back on the old ways of addressing a long-standing problem with short-term fixes. It hasn’t worked, and it won’t work. A patch today is a problem tomorrow.”
DiNapoli said that the State will struggle to make its planned payments next month. Since the budget’s enactment in April, DiNapoli has repeatedly warned that overly optimistic revenue projections would lead to the current fiscal year deficit, which could exceed $4 billion without timely, effective action.
DiNapoli’s report outlines some of the State’s limited options in the absence of action to address the current year deficit and a long-term, realistic plan to correct its chronic structural budget imbalance. The report highlights the negative consequences such options would have on the State’s fiscal future as well as the cost to taxpayers at the State and local levels. The report addresses cash flow for the remainder of the fiscal year, cash management, payment delays, and borrowing. Throughout the report DiNapoli reiterates the severity of the cash crunch, and the importance of addressing the State’s immediate and long-term budget problems.
Click here for a copy of the report.
Click here for a copy of the State’s most recent cash report.