DiNapoli’s Report Details Fiscal Challenges for State
Annual Report on State’s Finances Details Structural Budgetary
Imbalances, Higher Spending and Rising Debt
New York State spending is projected to grow significantly faster than revenues over the next four years, according to a report issued today by State Comptroller Thomas P. DiNapoli.
DiNapoli, who released his findings in the Comptroller’s annual report on the Financial Condition of New York State, noted that total State spending increased to $112.7 billion in State Fiscal Year (SFY) 2006-07, an increase of 26.6 percent from SFY 2002-03 more than twice the rate of inflation. Spending is projected to grow 31 percent over the next four years while revenues are only projected to increase 21 percent.
“There’s a structural imbalance in New York’s state budget, and it won’t just go away,” said DiNapoli. “There were some important reforms enacted this past legislative session, but more needs to happen. New York can’t wait any longer. The State has to set aside the piecemeal, random approach to reform. There has to be a comprehensive approach to government finance reform to correct the State’s long-standing structural problems.”
State-funded debt is also projected to increase to nearly $64 billion in SFY 2011-12 from $51 billion in SFY 2006-07, an increase of 31 percent since SFY 2002-03. The increase will drive debt service costs to an estimated $7.1 billion from $5.1 billion. New York State is the second most indebted state behind California and has nearly twice as much debt as the third most indebted state.
Among the report’s other findings:
- In SFY 2006-07, total tax revenues of $58.7 billion represented a 48.2 percent increase over SFY 2002-03 tax revenues. Personal income tax and consumer taxes and fees accounted for 42.7 percent of SFY 2006-07 revenues and have increased 43.6 percent since SFY 2002-03.
- During SFY 2006-07, the State experienced a 12.2 percent increase in personal income tax revenues. This is the State’s largest revenue source.
- State spending has been partially paid for by borrowing $11.2 billion since SFY 2002-03, including $2.2 billion in SFY 2006-07.
- New York’s spending in SFY 2006-07 totaled $5,841 per person.
- Education and public health spending represented 69 percent of All Funds spending in SFY 2006-07. Medicaid costs increased by $1.6 billion, or 5 percent, in SFY 2006-07, while the number of eligible recipients decreased by about 79,000. Local property tax levies outside of New York City increased 40 percent from 2001 to 2006.
The report also contains a breakdown of spending in all major categories, such as public health, public welfare, public safety, the environment, education and transportation. An overview of spending for capital projects and public authorities is also provided along with economic and demographic trends.
The annual report on the Financial Condition of New York State provides New York State residents with an overview of the fiscal situation of the State. DiNapoli also released the Comprehensive Annual Financial Report for SFY 2006-07 that contains a detailed and audited breakdown of state finances. For 18 consecutive years, the Office of the State Comptroller has been recognized by the Government Finance Officers Association and awarded the Certificate of Achievement for Excellence in Financial Reporting.
Click here for a copy of the Financial Condition of New York State for SFY 2006-07.
Click here for the Comprehensive Annual Financial Report for SFY 2006-07.