May 2001

Focus on the State Budget

From the NYS Assembly    Sheldon Silver, Speaker     Herman D. Farrell, Jr., Chair, Ways & Means Committee

State revenues are running $500 million ahead of what the Governor estimated we would see from April 15th tax returns.

Just this past February, the Governor estimated what New York State would see in revenues from people filing their tax returns on April 15th. The numbers are in now, and once again, the Governorís estimates are dead wrong. The reality is that April revenues are running $500 million ahead of where the Governor said they would be – – and a full $1.9 billion ahead of what he predicted when he released his budget earlier this year.

Over the past six years, the Governorís revenue estimates have fallen nearly $11 billion short ó resulting in missed opportunities for New York.

On March 31, the state ended Fiscal Year í01 with $3 billion more in revenues than the Governor predicted when he initially proposed his budget for last year. When coupled with existing reserves from Fiscal Year í00, New York ended this past fiscal year with a $5.5 billion reserve.

At the same time the Governor underestimated revenues, heís also proposed budgets that slashed state funding for education, health care, and other essential services. This has resulted in missed opportunities for New York and the people who are struggling to raise families, start businesses, and build a bright future in communities all across the state.

The Assembly already passed a balanced budget resolution based on our own historically accurate revenue forecasts.

We canít raise educational standards in our schools, keep college affordable, cut taxes for businesses and working families, and keep quality health care affordable if we donít know what our resources are. Armed with what have been proven to be the most historically accurate revenue forecasts, the Assembly has crafted a balanced, responsible state budget that invests with confidence in education, health care, and rebuilding our economy.

Our two-year plan restores the Governorís $1.1 billion cut in school aid and helps students meet the Regentsí tougher learning standards. We restore the Governorís $327 million Medicaid cut that threatens the quality of nursing home and home care services ĖĖ and the Assembly goes even further, providing funding to address the staffing shortages that plague our entire health care system. We call for responsible tax cuts targeted to businesses and families that need them most.

While national economic growth has slowed, real gross domestic product (GDP) grew two percent in the first quarter of 2001, and most economists are now prediciting that there will be no recession. Still, the Assembly plan leaves a $3.46 billion reserve at the end of the next fiscal year to assure New York is prepared for an emergency or a severe economic downturn.

Itís time for the Governor and Senate to stop stalling and come to the table to negotiate a fair budget.

Those hurt most by a late state budget are our schools, local service providers and state agencies. Right now, school districts are crafting their budgets without knowing what state aid they can expect.

They are left to wonder why the Governor and Senate will not negotiate a budget when we clearly have the resources to adequately address the needs of New York.

Additional information is available in the following Assembly reports:

  • Fiscal News, which provides information on April state revenues and looks at the accuracy of Division of Budget revenue forecasts; and
  • Economic News, which updates economic forecasts for the United States and New York State, and compares New Yorkís economic performance with other states

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