Comptroller Releases FY 2019-20 Executive Budget Report
March 4th, 2019
State Comptroller DiNapoli released his report on the proposed executive budget. The report notes that tax collections were dramatically short of projections and that the Division of Budget has since reduced estimates of tax receipts for the current and next fiscal year by $5.7 billion. DiNapoli cautioned that “[a]s lawmakers craft next year’s state budget, they are negotiating under the threat of slower economic growth, volatile financial markets and continuing revenue uncertainty. Decisions on the new budget demand an exceptionally high degree of caution, and I encourage the Governor and Legislature to bolster the state’s rainy day funds to better prepare for future fiscal challenges.”
Highlights from the Comptroller’s report include:
- Out-year budget gaps projected for the three years starting with SFY 2020-21 average $4.8 billion annually, including the effect of current proposals but before potential gap-closing actions;
- The budget is expected to use nearly $7.6 billion in temporary or non-recurring resources in SFY 2019-20, largely from extending the top rate on personal income tax and pre-paying debt service. As part of its response to the shortfall in SFY 2018-19 receipts, DOB also plans to use more than $1.5 billion in resources of this nature during the current fiscal year, including $491 million in monetary settlement proceeds going to General Fund relief and $310 million in accumulated fund balances;
- Various aspects of the budget raise concerns regarding transparency, accountability and oversight. Among several issues are more than $500 million in new lump sum appropriations for yet-to-be-determined projects, and measures that would bypass existing requirements for competitive bidding and Office of the State Comptroller contract review;
- The budget expands the use of off-budget spending for state programs, including shifting $297 million in Metropolitan Transportation Authority (MTA)-related resources and $75 million in debt service for mental hygiene facilities in the coming year;
- State-supported debt outstanding and debt service are both projected to increase by an average of 4.7 percent annually from the current year through SFY 2023-24. The budget proposes increased bonding authorization for state-supported debt of $5.1 billion, or 3.4 percent, over existing authorization. The state’s statutory debt capacity remains limited, declining to a projected $24 million in SFY 2022-23;
- Projected school aid would total $27.7 billion, an increase of $956 million, or 3.6 percent in State Operating Funds. The Financial Plan projects that school aid funded from commercial gaming revenues will grow to $161 million in SFY 2019-20; and
- The budget proposes a congestion tolling program in New York City to generate revenue for the MTA, and appropriates the final $1.5 billion of the state’s $7.3 billion commitment for the Authority’s current capital plan. However, financing sources for the majority of this commitment have yet to be identified.