New York’s enacted budget was “precariously balanced” with temporary and non-recurring resources, Comptroller Thomas DiNapoli said last week.
The state’s fiscal 2011 budget relied on $16.7 billion of temporary and non-recurring resources that will largely disappear over the next three years, DiNapoli said in a press release.
The comptroller’s office also identified $3.4 billion of resources that it said may not amount to that.
“After months of budget dysfunction and delay, New York is still on the edge of a very steep financial cliff,” DiNapoli said. “The state budget was passed 125 days late, and now there is danger that risky resources will fall short and create a gap in this year’s budget.”
New York lawmakers closed a $9.2 billion deficit and completed a $135.9 billion all funds budget last month. That came after Gov. David Paterson forced the hand of a deadlocked Legislature when he pushed through pieces of the spending plan by attaching them to emergency spending bills.
The two largest non-recurring revenue sources in the current fiscal year come from a temporary personal-income tax surcharge that is expected to generate $5.77 billion and $4.05 billion of additional Medicaid funds under the Federal Medical Assistance Percentages formula.
Some of the potential risks identified include $500 million of savings from workforce reductions and $440 million of new cigarette taxes which includes an imposition of those taxes on Native American sales, which has been challenged in court.
State spending continues to grow much more quickly than revenues, according to DiNapoli. This guarantees the state’s fiscal problems will continue year after year until the governor and the Legislature finally move forward with comprehensive budget reform.
All-funds spending increased by $9 billion compared to the previous fiscal year, but $4.1 billion of the growth was caused by the state’s delaying payments into the current fiscal year that were due last year.
State spending is growing faster than revenues, DiNapoli said. The state projects cumulative deficits of $37 billion through fiscal 2014.
