DiNapoli: Virus could mean a $7B hit to state budget 

ALBANY — Comptroller Thomas DiNapoli on Tuesday predicted the fiscal impact of the COVID-19 virus will include a hit of up to $7 billion in state tax revenue.

“The most optimistic revenue scenario” would be a drop in revenue of $4 billion, he said. “However, given deteriorating conditions and the potential likelihood of a deep recession in the coming year, one alternative scenario suggests that tax revenues … could be more than $7 billion below the executive budget forecast.”

Cuomo’s executive budget was crafted before the virus hit New York and is due to be passed by the State Legislature on April 1. Cuomo on Monday projected the virus may peak in 45 days, well after a budget is due. The current budget totals $175 billion.

“Right now, our revenue projection is so bad,” Cuomo told reporters Tuesday.

Long Island governments are also bracing for a hit in revenue.

“Even as health and safety take top priority, we know significant economic impacts are already hitting our businesses and residents,” said Nassau County Comptroller Jack Schnirman.

County Executive Laura Curran has convened an Economic Advisory Council of business and labor leaders to examine how much county revenue will drop.

There was no immediate comment from Suffolk County.

Cuomo and his budget director, Robert Mujica, said they will ask the Legislature to provide the governor with greater authority to change spending authorized by the legislature. Cuomo has sought similar powers in the past, but most were rejected by legislators, who argued it is their constitutional duty to authorize spending.

“You have to have the flexibility to make changes, to hold payments back, modulate payments forward … to allow us to make changes and calibrate through the year,” Mujica said. 

In his letter to Cuomo, DiNapoli said, “Definitive estimates of the COVID-19 impact on the economy and state revenues are not possible, in part because the ultimate health and social impacts of the virus are currently unknowable. Most available economic forecasts have not yet caught up with recent events, although projections have broadly weakened."

The independent Citizens Budget Commission urged Cuomo and the legislature to adopt a "bare-bones budget" by April 1, then adjust.

"The immediate challenge for New York’s elected leaders is to quickly pass a budget that sustains essential public services, provides for emergency responses to the growing pandemic, and prepares New York for an economically uncertain future," said CBC President Andrew Rein.

Cuomo has closed schools, state casinos, closed restaurants and bars and has restricted many businesses in an attempt to limit physical contact that spread the highly contagious virus.

Financial analysts have warned that the bleak fiscal picture is similar in Nassau and Suffolk counties, where tanking sales tax revenue — a major source of funding for local governments — puts more pressure on property taxpayers. One major cost the state and local governments share — Medicaid health care — is also expected to rise as more poor New Yorkers get sick and others lose their jobs.

And as sales tax and other revenue plummet, government costs for combating the virus skyrocket for the coronavirus that spreads faster than the traditional flu.

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.