The state Legislature may have to revise next year’s budget yet again as the projected deficit swells, Gov. David Paterson warned last week amid a comptroller’s report that state revenues were sliding.
Noting that a previous “buffer” of personal income tax increases had been used up as the state’s income declined over the last two months, Paterson revised an earlier projection that put the deficit around $2.5 billion for the 2010 fiscal year.
“I see that number as really $6 billion, and at a certain point I think we will come back,” he said during a news conference in Albany May 20. “We haven’t defined what time that will be. Sen. [Malcolm] Smith [D−St. Albans] pointed out that if it gets any worse, we might have to do it in June before we leave.”
The Legislature’s final session of the 2009 fiscal year is June 22. The new session will begin in July.
Paterson’s statements followed a May 19 announcement from state Comptroller Thomas DiNapoli that reported tax revenues in April were $4.8 billion, down $3.8 billion or 44 percent from April 2008 and $239.1 million below the governor’s April 28 projections.
“This was a poor start to the fiscal year,” DiNapoli said in a statement. “We’ve already tapped nearly all of our unreserved funds so there is very little cushion if revenues continue to fall. We need to watch revenues and spending very closely, because the state may be forced to readjust priorities.”
Paterson and the Legislature reached a budget agreement March 29. The $131 billion plan spends $10 billion more than the previous year’s budget, but Smith pointed out at an economic breakfast Friday that $7 billion of that came from federal stimulus funds, $2 billion from previously allocated capital projects, and $1 billion from debt service on bonds.
Reach reporter Jeremy Walsh by e−mail at jewalsh@cn
©2009 Community News Group
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