[As Prepared for Delivery]
In addition to the hard copies that are available to you here, you can find both of these reports on the Assembly web site.
Customarily, these reports are sent to the media just attached to a press release.
Given the magnitude of the current economic crisis, Ways and Means Chairman Denny Farrell, myself, and the members of our conference thought it would be best to give you the most comprehensive picture of what we are forecasting, because we want to reinforce what President Obama said on Monday night, that this crisis will get worse before it gets better.
Following my remarks and Chairman Farrell's comments, I will walk you through a brief slide presentation, and then we will be happy to take your questions.
You will notice that our revenue forecast is more bleak than the Governor's already negative forecast.
Keep in mind that our forecast includes updated information on unemployment and sales tax revenue that was not available at the time the Governor issued his forecast.
Also keep in mind that what makes this recession more difficult to forecast than past recessions is its volatility. The global economy seems to change from day to day. This, too, is a reason why our forecast is more cautious.
Essentially, we are finding the economy is rapidly getting worse and without government action, will become catastrophic.
Nationally, more than 1.8 million jobs have been lost in the last three months alone. We are seeing the largest decline in consumer spending since the Second World War. Home prices are falling. Foreclosures are rising. Stock market values are deteriorating. Consumer confidence is at an all time low. Debt levels are climbing and the credit crunch is continuing.
Even with a federal stimulus package, which, for the purposes of this discussion, we have pegged at $827 billion, Gross Domestic Product, will decline by 1.9 percent in 2009.
As important as Wall Street is to the national economy, it is very important to the fiscal health of our New York State economy.
We are forecasting that taxes will grow at rates significantly below their long-term averages.
Had the PIT, the sales tax, business and other taxes grown at just the average rate, our revenues would be $10 billion above current forecasts.
As it is, we are forecasting revenues to be more than a billion dollars below the Governor's forecast, meaning that we expect the budget gap for the coming fiscal year to exceed $14 billion.
I have said this many times, I will say it again. Closing a gap of this size will require federal aid, but even with the stimulus package that we are hoping for, the budget gap will still be massive.
Let's be clear.
We will also need to make deep cuts in programs and services that New Yorkers have come to depend upon, but we will not allow the burden of addressing this economic crisis to fall disproportionately on the backs of working families.
Look, we cannot simply cut our way out of this crisis. We will have to raise revenues, which, along with cuts and federal aid, are what we need to close the budget gap.
All New Yorkers will have to share in the sacrifice.
There are factors that may impact our forecast: the timing of the recovery, the effectiveness of the federal stimulus package, the restructuring and re-regulation of Wall Street, energy prices - which are low right now but can spike at any time, and the global economy - and particularly how national economies respond to this global recession.
Although New York is facing dire circumstances, our faith in our economy's ability to recover is bolstered by the confidence and the leadership we are seeing from President Obama and the members of his Administration.
As we develop our plan, using the Executive Budget as a starting point, we will use every tool at our disposal to address the budget deficit and to mitigate the hardship.
Let me close simply by acknowledging Denny Farrell, the Ways and Means Committee members and staff, for what clearly has been a difficult but outstanding job of helping all New Yorkers to understand this extremely serious and uncertain fiscal crisis.