ALBANY — State tax receipts are lower than projected, threatening some of the biggest deficits in nearly a decade, according to the state comptroller’s office and a fiscal watchdog.
“New York faces serious fiscal challenges,” said state Comptroller Thomas DiNapoli. “Projected budget gaps, weaker than expected personal income tax collections and cuts to federal programs combine for a triple threat of budgetary risks.”
DiNapoli, a Democrat, said any new federal funding cuts “could force difficult decisions regarding the funding of important programs and services.” In past years, when budget deficits were as much as $10 billion, cuts were made to health care and education, the biggest spending areas of the budget.
Although Cuomo has said in recent weeks that he anticipates a $4 billion deficit in the coming fiscal year, E.J. McMahon of the fiscally conservative Empire Center think tank said DiNapoli’s updated estimates could indicate a shortfall of as much as $6.8 billion. The current budget totals $163 billion including federal aid.
“The comptroller’s new estimate boosts the shortfall to $6.8 billion, by far the biggest prospective blob of red ink on Albany’s books since Cuomo took office,” McMahon said.
The Cuomo administration didn’t reject the projections by DiNapoli and McMahon, but noted they don’t include the cutting and cost-saving measures Cuomo uses in his budget proposals to keep annual spending increases around 2 percent.
“This administration has held spending growth to 2 percent — lower than any prior administration — which helps the financial plan to weather volatility,” said Cuomo’s budget spokesman, Morris Peters. “But with significant risks stemming from Washington, we are closely monitoring the situation as we prepare the state’s midyear update to the financial plan.”
McMahon said that even if Cuomo again keeps the increase in spending to around 2 percent, DiNapoli’s “estimate indicates the gap has grown to the daunting level of $5.4 billion, equivalent to nearly 6 percent of total state operating funds spending.”
By Nov. 15, Cuomo, the Senate and Assembly are by law to report actual, estimated and projected state tax receipts and spending for the current year and for the next fiscal year.
Cuomo is crafting his 2018-19 budget proposal that he will release to the legislature in January. The budget is due by April 1.