State finances fall short of expectations

New York State's financial picture is better than a year ago, but still is falling short of projections, State Comptroller Thomas DiNapoli said Friday.

While state tax collections during the first five months of the current fiscal year were $3.26 billion higher than during the same period last year, they were $75.7 million lower than forecast. Total tax collections were $24.94 billion in April through August.

Economic forecasts for growth "continue to be revised downward, raising concerns for the remainder of the fiscal year," DiNapoli said. "We should be prepared for the possibility that revenue growth may falter, requiring downward adjustments to the financial plan."

Division of Budget spokesman Morris Peters said there were no plans to modify its financial plan. "We believe that our financial plan is still on track," he said. "While the comptroller's office is correct that there remains uncertainty, at this time we're comfortable with our projections."

Spending has slowed down, too. While the state has spent $1.2 billion more during the period covered than it did a year ago, it has spent $77.4 million less than projected in its $132.5 billion budget.

The slower revenue growth coincides with the national picture in which the gross domestic product continues to grow, but at a much slower rate than last year. GDP measures the value of all goods and services produced during a certain time period. The national GDP grew by 1 percent in the second quarter, compared with 3.8 percent in the second quarter of 2010, and -0.7 during the same period in 2009, according to the U.S. Bureau of Economic Analysis.

In New York, personal income tax collections increased by $2.6 billion to $13.01 billion during the first five months of the fiscal year, a 20 percent jump from the same period last year. However, that increase is primarily a reflection of last year's economy as taxpayers who made estimated quarterly payments in 2010 had higher earnings to reconcile at tax time, according to the comptroller's office. Those improved receipts more than offset the loss of federal stimulus funds.