Every year the Governor publishes the Executive Budget, the starting point for further negotiations with the State Legislature that results in a finalized state budget. Rarely – if ever – does the Legislature reduce the size of the budget. I am positive that this year will not be any different.
The Comptroller’s office is required to review the budget and provide opinion (but not authority). Comptroller DiNapoli’s analysis reveals that the budget is unrealistic, relies on questionable assumptions, balances this year’s budget by moving even more debt (mainly, your state tax refunds) into next year’s budget, and over the next four years has a projected structural imbalance of $61 billion. And that’s just the first page.
• The Executive’s anticipated growth in revenue from the Personal Income Tax and other sources is based on an economic recovery, the timing of which remains uncertain.
• The lingering recession adds to fiscal stress by increasing the demand for programs and services such as Medicaid.
• Several revenue producing measures (sugared beverage tax, wine sales in grocery stores, Video Lottery Terminal and Quick Draw expansions) have similarly been proposed in the past, but not enacted.
• Numerous programmatic cuts have been proposed previously, but either were not enacted or were not fully realized. School aid, higher education and health care reductions are notable examples.
• Tax audit recoveries, new Medicaid audit recoveries and abandoned property transfers are budgeted aggressively at $1.1 billion.
Debt Service is the largest-growing budget category. It is growing even faster than both Medicaid and Education.
The growth in spending outpaces the growth in revenue, 7.7% to 2.9% – indicating that little if anything is being done to reduce the state’s structural imbalance.
On the upside, the state does plan to trim its workforce from 196,375 to 196,701 – a reduction of 674 positions (I’m being sarcastic). And under current law, our long-term debt cap cannot exceed 4% of our residents’ combined income. This won’t cause problems until the 2012-2013 time frame when our collective income is expected to fall and we exceed the cap.
The 34-page report is a pretty easy read. Recommended if you have an hour to spare in your busy day and prefer something like this over hitting yourself with a hammer.