Hurricane Sandy could add to state’s tax revenue shortfall
CAPITOL One of the biggest fallouts from Superstorm Sandy could hit New York state taxpayers hard.
Tax collections were $170.8 million below expectations in October before the storm hit New York City, Long Island and the Hudson Valley on Oct. 28, Comptroller Thomas DiNapoli’s review of tax revenues showed.
That gap is based on estimate revisions made in July. October’s revenues were more than $259.8 million below the estimate in the budget adopted in April.
The storm disrupted businesses for weeks, and many could take months recover while others may never reopen. That saps tax revenue from businesses and incomes. At the same time, the state’s costs are increasing for unemployment insurance payments for 50,000 workers put out of work by Sandy and for rising social services for victims.
Gov. Andrew Cuomo says the overall cost of property and economic loss will be $30 billion from Sandy in New York. Cuomo has asked for full reimbursement of that cost from the federal government, but that’s more than the Federal Emergency Management Agency has for the whole country. Congress could also cut FEMA funding as it seeks a budget deal in Washington.
For New York taxpayers, it will likely mean further strain on taxes and fees and reduced spending on some programs. A year ago, Cuomo and the Legislature raised income taxes $1.9 billion to balance the current budget.
This week, DiNapoli called for action now in the budget due April 1.
“Tax revenue estimates should be revised downward,” DiNapoli said.
“Adjustments should also factor in the additional costs from Hurricane Sandy. As recovery efforts continue, realistic projections are critically important for the state to effectively manage its available resources.”
In other findings, DiNapoli reported:
• Tax revenue growth was estimated to be 3.1 percent for the year, while October’s tax growth was just 1.5 percent.
• Spending by the Cuomo administration, however, was also down. It was $612.3 million lower than anticipated.
•This year, at least before Sandy hit Oct. 28, was trending better than a year ago.
General fund receipts were up 3.4 percent in October over the same month last year.