NY revenue falls $392M short of estimate

New York tax collections for the first half of the fiscal year missed projections by $391.9 million, state Comptroller Thomas DiNapoli said.

Personal income taxes, the largest source of revenue, were $16.5 million short of the forecast in the financial plan updated Aug. 2, DiNapoli said in a statement. Business-tax revenue in the general fund missed estimates by $338.1 million.

"If these trends continue, the state may need to adjust its revenue projections downward," DiNapoli said.

New York joins California and Florida in reporting revenue below forecasts this month. U.S. states are projecting combined budget gaps of $31.9 billion in fiscal 2013, according to the National Conference of State Legislatures in Denver.

Even though New York revenue fell below forecast, general-fund tax collections from April 1 through Sept. 30 rose $2.7 billion, or 14.2 percent, from the same period last year, DiNapoli said.

Unlike most states, where fiscal years begin July 1, New York starts its budget on April 1.

Last week, DiNapoli warned that the revenue is likely to fall short of targets as Wall Street bonuses shrink and firms shed thousands of jobs. In 2010, the finance industry accounted for 23.5 percent of wages paid by businesses while making up 5.3 percent of jobs, he said. DiNapoli projected the deficit for the next fiscal year at $2.4 billion, $400 million more than the estimate in March.

Gov. Andrew M. Cuomo's budget office will now begin its annual review of midyear spending and revenue, and is expected to release an updated version of the financial plan next month, according to the comptroller's office. The revised plan will "jump-start" budget talks for 2013, DiNapoli said.

Cuomo, a Democrat, said this month he expects to increase education and health care spending by 4 percent next fiscal year.

Cuomo has said repeatedly he won't support a new tax on residents who earn more than $1 million annually, which Assembly Speaker Sheldon Silver said he will introduce. During the last budget cycle, the Manhattan Democrat pushed Cuomo to extend a surcharge on individuals who earn more than $200,000, which is set to expire on Dec. 31. However, Cuomo and Senate Republicans, who hold a majority, opposed the plan.

Planners in the Cuomo administration believe that over the course of the full year, collections will even out, said Morris Peters, a spokesman for the budget office.

"We still believe we're on track for the year," Peters said. "While plenty of risks remain, our financial plan anticipated softness in the markets. Variances with the cash report are largely related to timing."