Years of fiscally irresponsible policies, government overspending, the prolonged economic downturn and a sharp drop-off in state tax revenues have fueled an explosive growth in New York’s two-year budget gap, according to Assembly Republican Leader Brian M. Kolb (R,I,C-Canandaigua) and Members of the Assembly Republican Conference, who publicly released their Consensus State Revenue Forecast today.
Kolb and the Assembly Republicans are projecting $884 million less than Governor David Paterson’s projection in General Funds Tax Receipts, and $1.35 billion less than the Governor’s projection in All Funds Tax Receipts. “General Funds Tax Receipts” refer to those tax receipts deposited into the state’s General Fund and utilized to finance state operations. “All Funds Tax Receipts” include those tax receipts that go to the General Fund and all other dedicated funds (i.e., mass transportation funds).
The forecast – driven by various national and state economic indicators – took into account not only New York’s poor economy, but also Governor Paterson’s 2010-11 Executive Budget. With all these factors accounted for, the Assembly Republican Ways and Means Committee forecasted a two-year General Fund budget deficit of $9.05 billion, compared to the Governor’s forecasted budget deficit of $8.2 billion. Furthermore, the Assembly Republicans’ forecasted that while an economic recovery has already begun for the United States, New York will not see a substantial economic resurgence until the middle of 2010.
In developing the forecast, the Assembly GOP Ways and Means Committee utilized the Washington University Macro Model of the United States economy, developed and maintained by Macroeconomic Advisers, LLC, and reports on the U.S. economy, also prepared by Macroeconomic Advisers. The Committee utilized New York State economic data and forecasts from Economy.com to supplement the Committee’s in-house model of the state’s economy.
As mandated by New York State Finance Law, if the Legislative Leaders and Governor Paterson cannot reach a consensus on available state revenues by March 1, the State Comptroller would then be required to issue a binding revenue forecast by March 5.
“As our forecast projects, New York’s fiscal outlook has gone from bad to worse. This should not come as a surprise: last year our entire Assembly Republican Conference voted against the 2009-10 State Budget because it contained too much spending, too many taxes and not nearly enough reform. That bad budget set the stage for this latest growth of the state’s budget deficit,” Kolb said.
“The answer to New York’s fiscal crisis and growing budget shortfall is not raising taxes or delaying taxpayer refunds. The answer is shrinking the size of state government by reducing spending – not controlling, but actually reducing it,” Kolb stated.
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