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Cuomo administration says deficit deepens, shows dire need for fed funds

 ALBANY – The Cuomo administration said Thursday that the COVID-19 virus and the economic shutdown it forced will cost state government $14.5 billion in revenue this fiscal year and underscores the need for a federal stimulus package now mired in Washington.

Thursday’s updated projection replaces the projection of a $13.3 billion loss estimated in April for the fiscal year. The state budget funds state services, but also local governments and schools. Deep losses in tax revenue can hit taxpayers in state income taxes as well as local property taxes and could lead to cuts in services.

The state Division of Budget projected that the virus will cost the state $62 billion through the 2024 fiscal year.

In April, the Legislature and Gov. Andrew M. Cuomo approved a $177 billion budget. But Cuomo and lawmakers were counting on a federal aid package to the state to avoid billions of dollars in spending cuts.

“While we remain vigilant to sustain our re-opening, the pandemic has done more damage to our economy than the Great Recession and is driving a fiscal crisis,” said Robert Mujica, Cuomo’s state budget director.  “The federal government must put an end to its months of dithering and deliver funding to states.”

The state has already reduced spending by nearly $4 billion from April to June compared to the first quarter of 2019. The savings was mostly through freezing hiring, new contracts, pay raises and other payments, according to the Division of Budget.

In Washington, President Donald Trump, the Democrat-controlled House and the Republican-controlled Senate continue to deliberate over a bailout package for states, which would also service local governments.

On Tuesday, state Comptroller Thomas DiNapoli reported Wall Street’s continuing recovery provided a rebound to investments on which the state pension fund depends, but also warned of continued economic uncertainty

“Until there is a solution to the global public health crisis, market volatility and uncertainty will continue,” DiNapoli said.

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