Finance

DiNapoli: Executive Budget Continues With Spending Restraints

February 15, 2013
By Susan Smith, LaborPress Albany Bureau

The 2013-14 Executive Budget continues the state’s effort to move toward long-term structural balance and reduces projected out-year budget gaps while addressing infrastructure needs, including the recovery from Hurricane Sandy, according to a report released today by State Comptroller Thomas P. DiNapoli.

DiNapoli’s report notes several concerns with the proposal including: an increase in the state’s debt burden; reliance on new temporary revenues; federal aid that may not materialize; and economic projections that might prove too optimistic.

“New York’s fiscal challenges are significant for the foreseeable future. In the face of a challenging economy, this budget appropriately restrains spending. However, it includes risks on both the spending and revenue sides of the ledger,” DiNapoli said. “It increases our debt burden and relies on temporary actions that will get us through short-term problems but pushes off some hard choices for another day. Clearly the state is facing difficult issues, but provisions of this budget need to be openly discussed by the Legislature so taxpayers know how resources are being used.”

The report also identifies proposed measures to enhance Executive authority that would likely help balance the budget, but may reduce transparency and long-established checks and balances. Such measures include:

·     A $1.75 billion multi-year transfer of resources from the New York State Insurance Fund (SIF), the state-owned workers’ compensation carrier of last resort, to the benefit of the General Fund and other State purposes;

·     New authority for most state agencies, authorities and other entities to engage in public-private partnershipsand to use private financing for public infrastructure;

·     A $3.3 billion increase in bonding authorization for state public authorities for SFY 2013-14, along with $273 million in authority funds for budget relief and other state purposes;

·     New borrowing provisions, including an authorization for the issuance of $944 million in DASNY bonds for SUNY dormitories that would allow new debt to be excluded from the state’s debt caps and would remove related debt service spending from the Financial Plan; and

·     Expanded Executive authority to allocate funding for capital projects and determine the source of funding for such projects, including more than $700 million in additional new New York Works appropriations and $1.17 billion in new appropriations for the Transformative Capital Fund.

DiNapoli’s report notes that economic projections in the Executive Budget include growth of 4.6 percent in wages and salaries in the state during 2013, and total employment growth of 1.3 percent, more optimistic than some other economic forecasters. The Executive Budget also assumes personal income tax collections will rise 6.6 percent, though that level of growth has not been achieved in recent years. The plan includes other revenue assumptions that have not materialized in the past, such as $175 million in proceeds from a not-for-profit health insurance company conversion and $133 million from Native American casinos.

February 15, 2013

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