FOR RELEASE:

DiNapoli's Report Details State Financial Challenges

Annual Report on State’s Finances Details Budget Imbalances,

Higher Spending and Rising Debt

Over the next four years, New York State will see expenses rise faster than revenues while facing mounting pressure from ever higher debt service obligations, according to a report issued today by State Comptroller Thomas P. DiNapoli.

DiNapoli released his findings in the Comptroller’s annual report on the Financial Condition of New York State. The report notes that total state spending rose to $116.1 billion in State Fiscal Year (SFY2007-08, an increase of 19.3 percent since SFY 2003-04, and at a rate well above the rate of inflation (13.3 percent). Even before the recent extraordinary events in the financial markets took place, state revenue collections were projected to increase at only half the rate that spending was projected to grow.

“I’ve been saying for a long time we have to fix New York’s finances,” DiNapoli said. “We need to be smarter about spending. The downturn in the economy has elevated the problems and limited our options. We need to address the state’s growing budget problems and tighten our belts. In difficult financial times, an informed public becomes even more imperative. Everyone should understand how their tax dollars are being spent.”

State-funded debt is expected to increase to almost $67.6 billion by the end of SFY 2012-2013 from $52.4 billion at the end of SFY 2007-2008. As a result, state-funded annual debt service costs will grow to an estimated $7.6 billion from the current $4.8 billion, making debt service one of the fastest growing budget areas.

Among the report’s other findings:

• New York’s spending in 2008 was $6,014 per person.
• State spending has been partially paid for by borrowing $11.3 billion since 2004, including $2.3 billion in 2008.
• For the 2006-07 school year, New York had the second highest per pupil expenditures of all states, estimated to be $14,206 in the public elementary and secondary system.
• In 2007, New York’s combined state and local tax revenues per $1,000 of personal income were 33.9 percent above the national average.
• Local property tax levies grew by 67 percent from 1997 to 2007, more than twice the rate of inflation.

The report contains a breakdown of spending in all major categories, such as public health, transportation, public safety and the environment. An overview of spending for capital projects and public authorities is also provided, along with economic and demographic trends.

The annual report of the Financial Condition of New York State provides the public with an overview of the fiscal situation of the state. DiNapoli also released the Comprehensive Annual Financial Report for SFY 2007-08 that contains a detailed and audited breakdown of state finances. For 19 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 2007-08.

Click here for the Comprehensive Annual Financial Report for SFY 2007-08.

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