| DiNapoli
Releases State Budget Analysis
ALBANY, N.Y. -- Although
the final state budget reflects a reduction in spending from what the
Executive proposed in January, the Enacted Budget contains unsustainable
spending, risky revenues that may not materialize and one-shot revenues
to fill budget shortfalls. The Enacted Budget also authorizes $11.5 billion
in additional state debt, according to a report
issued in a press release Friday by state Comptroller Thomas P. DiNapoli.
Major findings of
DiNapoli’s report:
- All Funds spending
projections for the 2008-09 Enacted Budget range from $121.4 billion
to $121.7 billion, an increase of more than $5 billion over 2007-08.
- Although the budget
is balanced, the report identifies several risks that could result in
a budget shortfall this year, including revenue initiatives that may
not materialize and tax collections that may be lower than expected
due to a weakening economy. Further, absent any new cost-cutting strategies,
out-year budget gaps could be as high as $9.5 billion by 2011-12.
- The final budget
contains $11.5 billion in new debt, which will be issued over the next
several years. None of this new debt is voter approved, nor is the debt
tied to any comprehensive plan to address critical infrastructure needs
of the state.
The report also noted
the following:
- Increased Reliance
on Debt: This budget significantly increases state debt and continues
to use debt to fill budget shortfalls, adding to New York’s already
high debt burden. The state’s current debt of $53 billion is projected
to exceed $67 billion by 2012-13. Debt service payments are estimated
to cost the state $7.5 billion annually by 2012-13, a 50 percent increase.
New debt issuances of $355 million for racing facilities include $250
million for expansion at Aqueduct. An additional $1.3 billion in new
debt is authorized for a variety of economic development programs and
$9.3 billion in new debt is included for capital projects at SUNY and
CUNY.
- Risks: The Enacted
Budget contains almost $1.5 billion in revenue that may not materialize,
including the conversion of not-for-profit health insurers to for-profit
status, sales tax from Native American retailers and VLT revenues. The
economic slowdown could further reduce tax collections from current
estimates.
- Non-Recurring Resources:
The Enacted Budget utilizes $2.5 billion in one-shots, including $400
million in sweeps from various dedicated funds, such as the Environmental
Protection Fund and the Elderly Pharmaceutical Insurance Coverage Fund.
- Off-Budget Spending:
The Enacted Budget includes $100 million in new off-budget spending
for various housing programs. DiNapoli said his office would provide
additional analysis of off-budget spending as well as the Executive’s
Financial Plan following its release by the Division of the Budget.
-- NYSSCPA.org News
Staff
Posted on 4/25/08
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