May 10, 2012
Around Town – By Neal Tepel
New York State ended its 2011-12 fiscal year having achieved major reductions in structural budget gaps, even in the face of unexpectedly weak economic conditions, but continues to face significant budgetary challenges in the years ahead, according to a report released today by State Comptroller Thomas P. DiNapoli.
“While the state is in a significantly better fiscal position today than at any time in recent years, history has shown that can change rapidly,” DiNapoli said.
“The economy has been recovering, but at a much slower pace than expected. Last fiscal year, the state experienced a great deal of volatility and state tax collections fell short of projections in seven of the last twelve months. We must carefully monitor the immediate revenue and spending trends, while further addressing the long-term gaps that remain.”
Statutory limits on spending growth in Medicaid and school aid, other spending reductions made during the year, and revenue increases enacted in December boosted the state’s long-term fiscal outlook and helped it maintain favorable cash-flow conditions during the year, according to DiNapoli’s report.
Tax receipts ended the year $233 million below the most recent projections made in February and $677 million below initial projections – a shortfall that would have been larger if not for the December tax code changes. State fiscal year 2011-12 was the fifth consecutive year in which tax receipts trailed initial expectations and budget gaps arose during the fiscal year.
Overall, tax collections increased by $2.9 billion, or 4.8 percent, from adjusted 2010-11 results, primarily because of strong PIT settlement results in April 2011. However, in conjunction with reduced economic forecasts, year-end tax revenue projections were reduced by the Division of the Budget (DOB) by a total of $444 million to $64.5 billion between the 2011-12 Enacted Budget Financial Plan and the Third Quarter Update to the 2011-12 Financial Plan.
The General Fund ended 2011-12 with a balance of $1.79 billion. This was $410.6 million more than the balance in 2010-2011, and $111.7 million more than projected in the last Financial Plan Update.