Assembly Issues Midyear Report On Economic Forecast, Revenues And Expenditures Forecast for 2012: Slow Growth in Employment, Wages and Tax Revenues Assembly Speaker Sheldon Silver and Ways and Means Committee Chair Herman D. Farrell, Jr. today provided a midyear update on revenues, expenditures and the economic outlook for New York State.
The Midyear Update, prepared by the Assembly Ways and Means Committee, is required by the "quick start" budget process in order to assist in creating and reviewing the state budget.
The findings of the Assembly report include the following:
Key economic indicators point to an ongoing but slow recovery. The Assembly forecasts anemic growth of 1.7 percent for the United States Gross Domestic Product in 2011 and 2012.
While the U.S. Economy began to recover from the "Great Recession" in 2009, there are signs of significant weakness defined by slow employment growth, 13.9 million workers unemployed, weary consumers who are spending cautiously as they face declining incomes and weak housing demand.
The Assembly revenue estimates for SFY 2011-12 and SFY 2012-13 are a combined $1.7 billion below enacted budget estimates and $187 million below the Executive's Mid-Year Financial Plan Update.
The All Funds tax revenue estimate for SFY 2011-12 is $64.5 billion, representing an increase of 6.0 percent or $3.68 billion above the prior year. This is $48 million above the Executive's Mid-Year Financial Plan Update and $425 million below the First Quarter Financial Plan Update.
The All Funds tax revenue forecast for SFY 2012-13 is $65.023 billion, an increase of 0.7 percent or $472 million over SFY 2011-12 estimates. This is $235 million below the Executive's Mid-Year Financial Plan Update and $1.27 billion below the First Quarter Financial Plan Update.
The Assembly estimates that in 2011 nonfarm payroll employment in New York State will increase 0.9 percent, wages will increase an estimated 4.4 percent and personal income growth is estimated at 4.9 percent.
The Assembly estimates that the New York State Department of Health (DOH) will spend approximately $15.26 billion in state funds for the Medicaid program in SFY 2011-12, which is about $64.2 million less than the Division of the Budget's midyear forecast. The Assembly projects DOH Medicaid program spending at $15.85 billion in SYF 2012-13, which is $89.2 million below the Division of the Budget's midyear forecast.
The report issued today is based on the best and most complete information available as of early November, 2011. The forecasts in this report are likely to be affected by changing conditions in the economy and in the securities industry. New information will be made available in February 2012 when the Assembly releases the New York State Economic Report and New York State Revenue Report.