New York State's tax collections dipped $1.3 billion in the first half of the 2016 fiscal year that began April 1, according to State Comptroller Thomas DiNapoli.
The state's largest revenue source, personal income tax receipts, are $1.2 billion below expectations and down 3% from the same period in 2015-16, DiNapoli noted in his
"Personal income tax collections continue to fall short of expectations, making the state's revenue picture uncertain," DiNapoli said. "The state has not seen the level of growth needed to meet year-end projections"
DiNapoli also cautioned that the state's financial situation is unclear as a result of nearly $9 billion it is receiving from non-recurring legal settlements and fines deriving largely from banks and their role in the 2008 financial crisis. He noted that a large share of the settlement dollars was supposed to be used to fund new capital investments, but much of the money have been earmarked for general budget support.
"The use of some settlement resources for ongoing spending and to boost the state's bottom line may be obscuring New York's true fiscal position and leaving uncertainty for the commitments already made," said DiNapoli. "Going forward careful attention will be needed to monitor the state's revenue and fiscal position."
Business taxes dropped 9.8% from April 1 to Sept. 30 compared to 2015, but exceeded projections. DiNapoli said the decline is attributed mainly to corporate tax reforms enacted in 2015 and decreased audit collections.
New York is rated Aa1 by Moody's Investors Service, and AA-plus by S&P Global Ratings, Fitch Ratings and Kroll Bond Rating Agency.
