Comptroller warns of long-term NY fiscal concerns

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Comptroller warns of long-term NY fiscal concerns Empty Comptroller warns of long-term NY fiscal concerns

Post by Rumrunner on Tue Aug 06, 2013 8:54 am

By By Michael Gormley
July 31, 2013

ALBANY, N.Y. (AP) — New York state Comptroller Thomas DiNapoli is sending an early warning that the government's long-term finances rely on one-shot revenue raisers and some temporary tax increases and that some fiscal sleight of hand will make state finances look better just in time for the 2014 elections.

Tuesday's fiscal year report shows the state's short-term outlook has clearly improved under Gov. Andrew Cuomo and the Legislature. But Cuomo has cut budgets already, including $10 billion his first year and billions more since then, which whittled down projected budget deficits through 2015.

Cuomo has eliminated more than $80 billion in budget gaps, administration spokesman Morris Peters said in an emailed statement. The administration's own financial analysis will be out soon, he said, and it will show the state is on solid footing.

But DiNapoli warned projected $2 billion deficits in coming years could balloon to $6 billion if one-shot revenue increases such as cash transfers and a $2 billion-a-year increase in income taxes for millionaires. The temporary tax increase has already been extended twice by Cuomo and the Legislature. DiNapoli also said the election year budget will appear better because of some 2014 payments were pre-paid this year.

"There's no doubt New York is in a better budget position now than it was a short time ago," DiNapoli said. "Still, without doing more to align recurring spending with recurring revenue, out-year gaps will likely continue. For years the state has used one-shots and temporary fixes to pay the bills."

Among DiNapoli's findings:

— Temporary resources include a $250 million transfer from the state Insurance Fund.

— The projected deficit for the 2014-15 budget is $2 billion, and $2.9 billion for each of the following fiscal years. However, if the temporary millionaire's tax increase and other temporary measures are allowed to expire as scheduled, future gaps could be $6 billion a year or more.

— The state paid some debt service and school aid in the current budget, a year before they were due. That "artificially inflates" the 2012-13 budget, which will "artificially lower" the current 2013-14 budget "making year-over-year growth appear lower." Cuomo and lawmakers will run for re-election in 2014.

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