New York will need to make cutbacks to plug a $384 million hole that opened up in the proposed fiscal 2009 budget when the division of budget revised its revenue projections downward, Gov. Eliot Spitzer said yesterday.
In a press release, Spitzer attributed the drop in projected revenues to a drop in the stock market, more than $30 billion of sub-prime related write-downs, and a slowdown in the national economy. The previous set of projections were reported two months ago. Financial services generate one-fifth of the state's tax revenue.
The revisions are expected to be submitted as amendments to the Legislature today.
The proposed budget released last month had forecast total state fund receipts to increase by $5.2 billion over the current fiscal year to $86.1 billion.
The governor expects to be able to save $237 million through savings actions while reestimates of existing spending has come in $147 million lower, primarily through lower than anticipated health care costs.
Some savings measures include $36 million in government agency efficiencies, $75 million through assessments on insurance companies, an $25 million increase in money borrowed from the state's environmental protection fund and a reduction in the increase for hospital, nursing home and personal care reimbursement by 10% to 25%.
According to the new projections, cumulative revenue from fiscal 2009 to fiscal 2012 will be $1.95 billion lower than previously expected, which in turn would open up larger outyear budget gaps that would grow from $3.6 billion in fiscal 2010 to $7.2 billion in fiscal 2012.
State Comptroller Thomas DiNapoli expects to release its revenue forecasts by the end of next week, a spokesman said. q