State Comptroller Thomas DiNapoli said today the recently enacted state budget raises spending by more than $5 billion over the previous fiscal year, projects tax revenues that are questionable in a weakening economy and contains $11.5 billion in new debt that will be issued over several years.
State budget review
To read state Comptroller Thomas DiNapoli’s complete review of the recently enacted state budget, click here.
“It’s clear this budget continues New York’s long but not-so-glorious traditions of spending more than the state takes in and borrowing too much,” DiNapoli said. Total spending projections range from $121.4 to $121.7 billion.
The nearly on-time budget with less spending than originally proposed by former Gov. Eliot Spitzer was “a remarkable achievement,” DiNapoli said. Final budget numbers are still pending, but the forecast for the national economy has continued to weaken, the report said.
Gov. David Paterson said on Thursday he will look for midyear cuts to help address a looming $5 billion deficit. And on Monday he called for state agencies to find savings and halt hiring for all but “absolutely essential” positions. The state employs more than 169,426 workers.
He had no immediate comment Friday on DiNapoli’s report.
DiNapoli said that without cost-cutting, future budget gaps could reach $9.5 billion in 2011-12. He noted that none of the new borrowing is voter approved or tied to any comprehensive plan to address the state’s “critical infrastructure needs.”
“The reality is that the economy is in rough shape and the worst may still be around the corner,” DiNapoli said. “Governor Paterson took an important first step to address the budget’s structural imbalance by telling state agencies to stop unnecessary spending now. All across New York, families are tightening their belts. It’s time for the state to do the same.”
According to the report:
—The budget continues to use debt to fill shortfalls, with New York’s current debt of $53 billion projected to top $67 billion by 2012-13 with debt service then rising to $7.5 billion a year.
—New borrowing includes $105 million for the state to acquire clear title to New York’s thoroughbred tracks from the New York Racing Association and $250 million for expansion at Aqueduct, $1.3 billion in new debt for various economic development programs and $9.3 billion for capital projects at the state and city university systems.
—Almost $1.5 billion in revenue may not materialize, such as the conversion of not-for-profit health insurers to for-profit status, sales tax from Indian retailers and VLT revenues.
—The budget uses $2.5 billion in one-time items, including $400 million in sweeps from various dedicated funds, such as the Environmental Protection Fund and the Elderly Pharmaceutical Insurance Coverage Fund.