The State ComptrollerÃ¢â‚¬â„¢s Office recently released its quarterly cash report. The report states that revenues are about $305 million below what economists projected for the April through June 2009 period. The report is significant because it is the first actual look at estimated income tax payments for the year. By that measure, the Comptroller predicts weÃ¢â‚¬â„¢ll be in for mid-year budget cuts again this year.
This comes as no surprise to those who have been paying close attention to state budget matters. As IÃ¢â‚¬â„¢ve stated in the past, this yearÃ¢â‚¬â„¢s enacted budget was abominably irresponsible. Our state leaders not only circumvented important bipartisan leadersÃ¢â‚¬â„¢ meetings during negotiations but they passed a fiscally unsound budget. We knew going into the budget process in December 2008 that we would need to make cutsÃ¢â‚¬â€several cutsÃ¢â‚¬â€to maintain a balanced budget. Economist gave strong warnings against anything less and advised to keep spending in line with projected revenue shortfalls to specifically avoid mid-year budget cuts. Unfortunately, these warnings fell on deaf ears.
In February, our state was awarded $24.6 billion as a result of the federal Economic Stimulus Package. Approximately $6.2 billion went toward our $131.8 billion 2009-2010 budget. Rather than using the stimulus as it was designedÃ¢â‚¬â€to help us weather the recessionÃ¢â‚¬â€the state used it as a means to keep spending. In two years, when the Federal Stimulus money is gone, we will again be faced with multi-billion dollar deficits. Further, the Ã¢â‚¬Å“MillionaireÃ¢â‚¬â„¢s TaxÃ¢â‚¬Â enacted in this yearÃ¢â‚¬â„¢s budget will stifle business investment and alienated a substantial revenue base. The budget made few changes to programs like Medicaid, which will grow by 1.1 million recipients through 2013. Debt is expected to grow by 9.3 percent from 2007-08. I voted against the budget for these reasons and for many others.
The GovernorÃ¢â‚¬â„¢s Division of Budget is scheduled to release its financial plan this month, which describes the stateÃ¢â‚¬â„¢s budget projections for this year and the next three years. ItÃ¢â‚¬â„¢ll be interesting to listen to the rhetoric the DOB has to offer. It will likely include many allusions to the recession Ã¢â‚¬Å“being worse than anticipatedÃ¢â‚¬Â which have Ã¢â‚¬Å“kept receipts lower than anticipatedÃ¢â‚¬Â when in reality it was too much spending that keeps our state fiscally unsound. Last year at this time, the Comptroller warned of overspending and the Governor brought the Legislature together to make mid-year budget cuts. Those cuts hurt local programs and left many in a lurch. Unfortunately, it looks as though weÃ¢â‚¬â„¢ll have to make them again this year due to lack of planning.
This latest report again illuminates our need for budget reform. Our state has had a spending problem for years. Over the past 10 years, state spending increased by $52 billion or 71 percent. If state government had kept spending to the rate of inflation for those ten years, we would have saved taxpayers approximately $30 billion and would be operating in a surplus. ItÃ¢â‚¬â„¢s time we spent within our means and managed the stateÃ¢â‚¬â„¢s budget as one would a household.
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.