Latest Report Shows Revenues Shorter than Projections Again

Many who have been watching the state budget process closely are watching economists’ predictions come true. In the State Comptroller’s most recent cash report, total revenues continued to fall short of projections. The General Fund tax revenue of $13.8 billion was $238 million below projections, and personal income tax collections remain $114 million lower than the projections through August. These numbers do not come as a surprise, but what’s disconcerting is how unprepared our state is to handle these shortfalls.

Mid-year budget cuts are, unfortunately, likely again. In the spring budget session, our leaders did not choose to make the tough choices and instead, agreed to raise taxes and fees. They also chose to ignore sound financial advice people like the Comptroller warned would come to fruition in the midst of a recession.

In the latest cash report, General Fund receipts through August 2009 of $18.6 billion were $444.5 million below financial plan projections and nearly $5 billion lower than last year for the same period. The difference is primarily due to lower personal income tax collections in the beginning of the fiscal year. With more people unemployed, this comes as no surprise.

The Comptroller says “tough choices on spending could have been made during the spring budget process. Avoiding those choices has made the state’s fiscal condition even more challenging.” He has given stern warnings concerning the way our state finances are managed before and they, unfortunately, seem to fall on deaf ears. The full legislature should come together to make cuts that would sustain our fiscal health. Our leaders should do all in their power to make this happen, however, no one has even called a budget hearing.

The State Assembly should have met by now to address the $2.1 billion deficit in some capacity. Whether by special session or budget hearings, our Speaker has not made any provisions to address the deficit, despite the Governor’s request to have the State Legislature come together and cut the budget. This concerns me. We should start the conversation now as to how to trim the budget, rather than waiting for a repeat of last year when budget gaps were closed by assessing new fees and taxes. My constituents have made it clear they will not and cannot tolerate another budget that increases spending and taxes and fees so dramatically. I will continue to vote against budgets that spend beyond our means.

If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at [email protected] or by calling (315) 598-5185.