Consensus State Revenue Forecast: Storm Clouds Gathering In New York’s Financial Future
On Wednesday, in accordance with State Finance Law, our Assembly Minority Conference publicly released its Consensus State Revenue Forecast, a comprehensive document that includes projections of state revenues, New York’s budget deficit and the overall condition of our economy. It is called a “consensus” forecast because if Legislative Leaders – myself, Assembly Speaker Sheldon Silver, Senate Minority Leader Dean Skelos and Senate Majority Conference Leader John Sampson – and Governor Paterson cannot reach agreement on available revenues by March 1, 2010 then the State Comptroller would be required to issue a binding revenue forecast by March 5, 2010.
FORECAST CALLS FOR A STORMY FINANCIAL FUTURE
Our forecast indicated that years of fiscally irresponsible policies, government overspending, the prolonged economic downturn and a sharp drop-off in state tax revenues have fueled an explosive growth in New York’s two-year budget gap. Specifically, we projected $884 million less than Governor David Paterson’s projection in General Funds Tax Receipts, and $1.35 billion less than the Governor’s projection in All Funds Tax Receipts. “General Funds Tax Receipts” refer to those tax receipts deposited into the state’s General Fund and utilized to finance state operations. “All Funds Tax Receipts” include those tax receipts that go to the General Fund and all other dedicated funds (i.e., mass transportation funds).
The forecast – driven by various national and state economic indicators – took into account not only New York’s poor economy, but also Governor Paterson’s 2010-11 Executive Budget. With all these factors accounted for, our Assembly Minority Ways and Means Committee forecasted a two-year General Fund budget deficit of $9.05 billion, compared to the Governor’s forecasted budget deficit of $8.2 billion.
FORECAST FOR NY’S ECONOMY: A SLOW-MOVING RECOVERY
On the issue of the economy, our forecast indicated that while a recovery has already begun for much of the United States, here in New York, we would not see a substantial economic resurgence until the middle of 2010, at the earliest. That is bad news for the more than 800,000 New Yorkers who are out of work.
It is also why I continue calling for a comprehensive statewide job creation plan to rebuild New York’s private sector and put people back to work as quickly as possible. Getting our economy moving again must be job one.
In developing this forecast, our Assembly Minority Ways and Means Committee utilized the Washington University Macro Model of the United States economy, developed and maintained by Macroeconomic Advisers, LLC, and reports on the U.S. economy, also prepared by Macroeconomic Advisers. Our Committee also utilized New York State economic data and forecasts from the Economy Web site to supplement the Committee’s in-house model of New York State’s economy. Simply put, we did our homework. In fact, our Conference’s revenue forecasts are typically the most accurate.
ALBANY MUST REDUCE SPENDING
As our forecast projected, New York’s fiscal outlook has gone from bad to worse. This should not come as a surprise: last year our entire Assembly Minority Conference voted against the 2009-10 State Budget because it contained too much spending, too many taxes and not nearly enough reform.
Back on March 31 of 2009, right after the budget passed, I publicly said it would do further harm to already struggling middle-class families and job-creating businesses. It has. That bad budget also set the stage for this latest growth of New York’s budget deficit.
The answer to the state’s fiscal crisis and growing budget shortfall is not raising taxes on hard-working families or delaying taxpayer refunds as Governor Paterson is currently considering. Instead, we need to focus on shrinking the size of state government by reducing spending – not controlling, but actually reducing it. Reducing spending is the first step toward “starving the beast” that state government has regrettably become.
New Yorkers already swamped from a perfect financial storm caused by recession, an underperforming economy, reckless government overspending and some of the highest taxes in our nation are hurting like never before. That perfect financial storm has caused real pain for real New Yorkers. If all 212 legislators and the Governor could set aside partisan politics and work toward real solutions to help create private sector jobs, reduce taxes and reform state government, future financial forecasts for the Empire State would show brighter days ahead.
As always, constituents wishing to discuss this topic, or any other state-related matter, should contact my district office at (315) 781-2030, or e-mail me at email@example.com. You also can follow me on Facebook and Twitter for the latest news and informational updates regarding state government and our Assembly Minority Conference.