The state's fiscal year (SFY) 2018-19 Enacted Budget Financial Plan projects that spending will outpace revenues over the next three years with potential cumulative gaps totaling $17.9 billion, according to a report released today by State Comptroller Thomas P. DiNapoli.
"The state ended the last year with the largest General Fund balance in recent years, but continues to face real fiscal challenges," DiNapoli said. "New York's growing out-year gaps, shrinking debt capacity and the lingering threat of federal funding cuts cloud the horizon. Yet, there are no plans to add to our reserves, leaving the state with little cushion in the event of an economic downturn."
The $170.3 billion spending plan is up $6.5 billion from SFY 2017-18. Total receipts are expected to increase 0.3 percent, or $541 million, to $166 billion, from last year.
The Division of the Budget (DOB) expects that the state will utilize 42 percent of the $9.4 billion General Fund balance from SFY 2017-18 in the current fiscal year, and that General Fund reserves will decline to $2.9 billion by SFY 2021-22.
Total tax receipts this year are projected at $77.9 billion, down 1.7 percent from the previous year, reflecting factors such as the timing of personal income tax collections in SFY 2017-18. Consumption and use tax receipts, primarily from the state sales tax, are projected to increase 3.5 percent this year to nearly $17.3 billion. Business tax revenues are projected to reach nearly $8 billion, up 11.4 percent from SFY 2017-18.
Federal receipts are projected to rise $1.1 billion to $60 billion this year and represent 36 percent of total revenue for the state. More than two-thirds of federal funds spending, $38.3 billion, is for local assistance Medicaid payments through the Department of Health. Calls by the President and some members of Congress for major changes to federal funding for health care and other programs are among the most notable budgetary risks for New York.
State-supported debt service is projected to increase by an average 4.4 percent annually through SFY 2022-23, when it will reach $7.3 billion.
The combined balance of the state's primary reserve funds, the Tax Stabilization Reserve Fund and Rainy Day Reserve Fund, is $1.8 billion, less than half of the $5.2 billion they are currently authorized to hold. The last deposits to these funds were made in 2015 and no further deposits are projected during the four-year Financial Plan period, according to the report.
DiNapoli's report also notes:
- More Spending Taken Off-Budget: The Financial Plan presents this fiscal year's growth in State Operating Funds spending as 2 percent. This reflects the movement off-budget of $1.4 billion in disbursements for the Metropolitan Transportation Authority (MTA), as well as other budget management actions;
- Spending on Capital Projects Decreasing: Capital spending is projected at $66.5 billion over the five-year Capital Plan period ending in SFY 2022-23, a decrease of $2.7 billion from the plan issued a year earlier. The plan indicates that reductions in spending are necessary to avoid exceeding the statutory limit on outstanding debt. Actual capital spending in SFY 2017-18 was $2.1 billion lower than estimated in this year's Executive Budget; and
- Billions in Temporary Resources: The Financial Plan includes nearly $6.7 billion in temporary and non-recurring resources, excluding federal funds. Such use of temporary resources is among the factors leading to projected budget gaps in future years. The state has also collected $10.9 billion in extraordinary monetary settlements since April 2014, and spent $4.9 billion through March 31. One-time resources such as these funds are most appropriately used for capital investments or other one-time expenses. Of the total spent, $2.1 billion, or 37.5 percent, had been used for various forms of budget relief.
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