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September 16, 2010

DiNapoli: Budget Risks Are Not Over

After Ending August with Balance, General Fund in the Red for September

Nearly halfway through the fiscal year, the state closed the month with a positive General Fund balance of $527.9 million according to the August Cash Report released by State Comptroller Thomas P. DiNapoli today.  However, the General Fund has maintained a negative daily cash balance every day since September 3.  The state’s cash position remains precarious as the positive variance appears to be due to the timing of certain payments not made as planned in August that will likely be paid in September.

DiNapoli noted billions of dollars in payments were rescheduled for later this month, including more than $3 billion in education aid, pursuant to legislation enacted with the budget, primarily out of concern for the state’s cash position. Restoring the General Fund to a positive balance will depend on whether the state brings in enough revenue in the second half of the month. The Division of the Budget also released its plan to reduce remaining local assistance payments to implement the recently enacted FMAP contingency legislation.

“While we continue to see positive signs, there is still a tremendous amount of risk associated with the economy and the financial plan,” DiNapoli said. “We already know we have significant gaps next year and beyond because of the temporary revenues we are currently living on.  If the few positive signs start to slow, we will face problems sooner than anticipated and could face a budget gap this year.  The state’s budget is by no means out of the woods.”

DiNapoli previously identified approximately $16.7 billion in temporary resources used to finance the current year’s state budget with current estimates of out-year budget gaps exceeding $37 billion through 2013-14. Any new cash flow deficits will worsen deficit concerns. DiNapoli’s cash report found:


  • Through August 31, General Fund receipts, including transfers from other funds, were $19.1 billion, $526.9 million or 2.8 percent above the same period last year, but $174.6 million below projections (primarily due to lower transfers in excess of debt service needs from the Local Government Assistance Fund from sales tax collections).
  • Total General Fund tax collections through August 31 totaled $14.3 billion, up $566.7 million, or 4.1 percent, from last year and $25.4 million below projections.
  • Year-to-date General Fund Personal Income Tax collections were $9.3 billion, $484.6 million or 5.5 percent above last year. Withholding collections, the state’s second largest revenue source, increased 7.3 percent from the same period last year. Personal Income Tax receipts included $500 million in additional refunds that were delayed from the SFY 2009-10 fiscal year, which artificially reduced growth.
  • Year-to-date General Fund consumption tax collections, including sales taxes, were $3.4 billion, $229.6 million above collections from the same period last year and $2.9 million over projections. Sales tax collections were $3.1 billion, $219.9 million, or 7.5 percent, higher than last year.
  • Year-to-date General Fund business tax collections were $1.1 billion, $304.6 million lower than collections for the same period last year and $80.2 million below projections. Miscellaneous receipts were $740 million, $35.9 million higher than collections from last year and $8 million above projections.
  • All Governmental Funds receipts through August 31 were $49.3 billion, $3.3 billion or 7.1 percent higher than last year for the same period, primarily due to federal receipts and tax collections. All Funds receipts were $177.1 million below projections.  However, collections for the new Metropolitan Transportation Authority’s Commuter Tax and Taxicab Medallion User Tax totaled $594.8 million through the first five months.
  • Total tax collections were $21.7 billion, up $1.2 billion, or 5.9 percent, from last year, reflecting not only growth, but also new collections from the Metropolitan Transportation Authority’s Commuter tax and Taxicab medallion user tax. All Funds tax collections were $78.1 million below projections.  Federal receipts increased by $2.4 billion from last year. Miscellaneous receipts through August 31 were nearly $8 billion, $289.6 million lower than collections for the same period last year, primarily reflecting the timing of collections and non-recurring resources collected last year that have not occurred this year.  Miscellaneous receipts were $368.9 million below projections.


  • General Fund spending, including transfers to other funds, was $20.9 billion, $1.1 billion, or 5.4 percent, higher than last year through August 31. The increase in spending was mostly due to costs for Medicaid (up $1 billion primarily due to the deferred payment of the last cycle of SFY 2009-10 in April 2010, a reduction of recoveries and rebates used to offset Medicaid costs as well as an increase in claims) and education (up $918.9 million, primarily due to delayed payments from SFY 2009-10).  These increases were offset by health and environment (down $362.6 million) and other social services (down $335.2 million).  General Fund spending was $730.8 million below Financial Plan projections released August 20 primarily because of the timing of payments, including those for certain higher education services, related to the late passage of this year’s budget.
  • All Governmental Funds spending through August 31 was $49.1 billion, nearly $3 billion, or 6.4 percent, higher than last year for the same period, primarily due to increases in education ($2 billion) and Medicaid ($1.5 billion).  These increases were offset by lower spending for General State Charges (down $287.5 million) and Department Operations (down $303.1 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 and the state’s current year Financial Plan.

To view DiNapoli’s August Cash Report, visit:



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