October 31, 2020
New York State Division of the Budget Announces Release of the FY 2021 Mid-Year State Budget Financial Plan Update
The New York State Division of the Budget announced today the release of the FY 2021 Mid-Year State Budget Financial Plan Update (PDF), which projects a $14.9 billion General Fund revenue decline and a 15.3% All Funds tax receipts decline from the Budget forecast released in February, creating a total loss of nearly $63 billion through FY 2024 as a direct consequence of the COVID-19 pandemic.
In the absence of Federal funding to offset this revenue loss, the Financial plan shows the State reduced spending through September by $4.3 billion compared to FY 2020 spending over the same period. The State has done this by freezing hiring, new contracts and pay raises, and temporarily holding back 20% of most payments.
Pandemic’s Cost in New York: $63 Billion
BY NICK REISMAN, SPECTRUM NEWS
PUBLISHED 6:41 PM ET OCT. 30, 2020
The grim news was laid out in a report released Friday afternoon by Gov. Andrew Cuomo’s budget office: The pandemic has cost New York $63 billion in revenue through 2024 and the state will need federal assistance.
The mid-year state budget report estimated the state’s main general fund saw a $14.9 billion decline and a 15.3% loss in tax receipts since the original budget estimate was released in February.
The state has reduced spending through September by $4.3 billion over the same period a year ago. That’s been done through restricting hiring, new contracts, pay raises and what the Cuomo administration has said is a temporary holding back of payments by 20%.
Cuomo has warned the state will need federal aid or it will face a mix of spending reductions, tax increases on wealthier New Yorkers and more borrowing in order to close a budget gap next year. So far, another coronaviruse relief measure has stalled in Congress.
“While COVID-19 infections are spiking dangerously around the country and world, New York State – with New Yorkers leading the way – has been able to continue our re-opening and get New Yorkers back to work even as the pandemic has already done more damage to our economy than the Great Recession,” said Robert Mujica, the governor’s top budget aide.
“The federal government must live up to promises that funding will be provided to states. The only alternatives to federal funding are spending reductions – a devastating impact on schools, hospitals, police and fire departments, along with other critical services –long-term debt and revenue raisers that may impact our competitiveness and weaken New York State’s ability to lead the national economic recovery as producer of 8% of national GDP. In the meantime, we’re not waiting idly by and have already reduced year-over-year spending by $4.3 billion so that the state maintains a balanced budget even if the federal government fails to act.”