New York State may face fiscal challenges from revenue growth that's slower than forecast earlier and from potential federal budget changes, according to the state’s top fiscal officer.
A report released Friday by New York Comptroller Tom DiNapoli found that the state Division of Budget estimates tax receipts will increase by 4.8% for the 2018 fiscal year, compared with the 6.1% that was projected in February. DiNapoli said the Empire State also faces “substantial reductions” in federal aid for healthcare and other programs. While there is a process to tackle possible cuts from Washington, he said the full impact on the state budget and entities that rely on state funding is unclear. Forecasted grants to the state of $56.6 billion account for one in every three dollars spent in the financial plan.
“The state’s fiscal outlook is clouded because of uncertainty in Washington, falling revenues, and fiscal practices that obscure the level of spending,” DiNapoli said. “If revenues continue to fall short, projected out-year budget gaps may grow further.”
DiNapoli said that more than two-thirds of the state’s $7.7 billion general fund balance at the end of the 2017 fiscal year on March 31 was comprised of bank settlement funds. At the end of fiscal 2018, he said, the fund balance is expected to be one-third lower than its recent peak of $8.9 billion two years ago. Projected out-year budget gaps for the next three years total $17.4 billion, an increase of nearly $11.2 billion from previous estimates outlined for this year’s budget, DiNapoli said.
State-funded debt outstanding is projected to rise 4.1% this year, to $63.9 billion, and to reach $73.7 billion by the end of the Capital Plan period. State-Funded debt service is estimated to approach $8.4 billion by 2022 reflecting an average annual increase of 3.1% in the five-year period.