September 09, 2010
DiNapoli: Clock is Ticking on $16.7 Billion in Temporary Resources
Broken Budget Process Shows Reforms Needed Now More Than Ever
In an analysis of the final state budget released today, New York State Comptroller Thomas P. DiNapoli warned that the 2010-11 Enacted Budget is precariously balanced using $16.7 billion in temporary and non-recurring resources, most of which will disappear within three years. The enacted budget also includes up to $3.4 billion in risky resources that may not be fully realized. DiNapoli cautioned the slowing recovery of the economy could further exacerbate the state’s tenuous financial condition and create a current-year budget gap.
“After months of budget dysfunction and delay, New York is still on the edge of a very steep financial cliff,” DiNapoli said. “The state budget was passed 125 days late, and now there is danger that risky resources will fall short and create a gap in this year’s budget. Close monitoring of the budget is crucial to make sure the state does not fall off that cliff.
“Our report shows that state spending continues to grow much more quickly than revenues. This structural flaw guarantees the state’s fiscal problems will continue year after year until the Governor and the Legislature finally move forward with comprehensive budget reform. I’ve given them a blueprint for reform; it’s up to them to move forward.”
The Division of the Budget’s Enacted Budget Financial Plan projects a cumulative out-year gap of $37 billion through 2013-14. The use of temporary resources to balance the budget increases the potential revenue shortfall the state faces in the out-years. In addition, concerns that the economy will not recover as fast as projected and resources may not materialize as expected could heighten the risk that the state will face even larger gaps than current projections.
DiNapoli has proposed a number of fiscal reforms to transform New York’s budget process. DiNapoli’s plan would: require the Governor to identify actions to close out-year gaps; require the Executive and Legislature to identify all revenues that are available for spending; restrict the use of one-shot revenues to pay for ongoing expenses; prohibit blanket sweeps; end back-door borrowing; prohibit borrowing for operating purposes; and increase transparency in the budget process and budget documents.
DiNapoli’s report on the Enacted Budget found:
DiNapoli’s office will continue to monitor the state's fiscal condition throughout the fiscal year and provide frequent reports on the status of the enacted financial plans.
To view DiNapoli’s full report on the 2010-11 Enacted Budget, visit: http://www.osc.state.ny.us/reports/budget/2011/2010-11enactedbudgetreport.pdf.
To view DiNapoli’s Strategy for Fiscal Reform, visit: http://www.osc.state.ny.us/press/releases/mar10/030910.htm.