Waiting and Seeing on the New York State Budget

For all of you who have followed New York State’s perennial budget dance, here is a first for you, or is it?

We all know that New York is notorious for not having a budget in place at the start of its fiscal year, April 1st. Our new Governor, Andrew Cuomo also had the dubious task of having to also figure out how to close a $10 Billion deficit, without resorting to the Federal government’s trick of printing more money and selling the debt to China. Yet, low and behold, he claims that he did it!

In today’s press release, the governor announced that this year’s budget will be in place by April 1, be two percent less than the current year’s spending, doesn’t raise taxes and, at $132.5 Billion, wipe out the $10 Billion deficit. This is where I get confused.

Two percent of $132.5 Billion is $2.65 Billion, not $10 Billion. So where is the other $7.35 Billion in savings coming from? The only other way that you can make up over $7 Billion dollars without increasing taxes is by revenue growth and, on a $132 Billion budget that would be over five percent! Now we know that the economy is still in the toilet and the GDP growth is less than three percent, so why would the heavily taxed New York economy generate so much more growth in revenue than the national average?

Notice that the press release did not have any real specifics on how any of this was going to be done. Oh well, the devil has always been in the details.

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One Comment to “Waiting and Seeing on the New York State Budget”

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