New York State Comptroller Thomas DiNapoli released a report this week on the state’s tax collections which fell $170.8 million below projected collections estimated in July. This brings the total shortfall $259.8 million below initial estimates this past spring.
Total revenues for New York’s fiscal year 2012-13 so far total $35.9 billion through October. At the end of last month, the closing balance on the general fund was $3.65 billion, $593 million higher than July’s expected balance.
New York’s budget for fiscal year 2012-13 totaled $132.6 billion. The shortfall in tax collections is nothing new to New York. In fiscal year 2009-10, the budget totaled $131 billion and had a tax collection shortfall of $529, leading DiNapoli to say that the budget for that year was “seriously flawed” and “was based on overly optimistic revenue assumptions and temporary revenue sources that pushed the problem into the future.”
In fiscal year 2010-11, the budget totaled $135.5 billion and tax collections fell short by $926 million, leading New York to a budget gap of $5.4 billion.
In Fiscal year 2011-12, the budget totaled $132.5 billion under the new Cuomo administration. Tax receipts still fell short by $584 million leading to a shortfall of $350 million.
“Tax collections were lower than expected through October,” said DiNapoli this week. “Tax revenue estimates should be revised downward. Adjustments should also factor in the additional costs from Hurricane Sandy. As recovery efforts continue, realistic projections are critically important for the state to effectively manage its available resources.”
State spending has been $612.3 million lower than expected. The Office of the State Comptroller (OFC) cites issues “largely attributable to… timing.”
The OFC reports that all governmental spending has decreased 2% or $1.4 billion compared to last year and attributes the decrease to $1.8 billion in cuts for local assistance. The report states that, “Debt service increased $35.9 million (1.5%). Departmental Operations spending increased 0.6 percent, or $60.3 million, compared to the same period last year.”
Tax collections from New York’s businesses are at $2.6 billion so far this fiscal year, $163.9 million more than last fiscal year, but still falling short by $57.3 million of the updated projections.
The state’s elected officials continued to project higher tax revenues this year than were eventually received. The shortfalls in revenue from tax payers’ and federal funds cause the state to borrow money and dig itself deeper into debt which remains at over $315.2 billion and unemployment at over 834,000.