New York faces projected budget gaps of $2.8 billion in the fiscal year starting April 1, and $4.6 billion the next year, a report on this year's budget by the state Comptroller H. Carl McCall says.

After adjusting for accounting differences from the previous fiscal year, this year's budget increases spending "at about one and a half times the rate of inflation," Comptroller McCall said.

State-funds spending (total expenditures minus federal funds) will rise this year by 4.2 percent after adjusting for accounting changes, he said.

The Business Council's Board of Directors has identified a low-growth budget as one of the priority issues state leaders should address in 2000.

Major new spending includes a $913 million, or 7.8 percent, increase in state aid to education; and $117 million in new General Fund spending for Medicaid, according to the report.

"Tax collections continue to be robust, despite $1.8 billion in tax cuts being phased in during 1999-2000," it said. It added that New York has a "continued over-reliance on debt" which does not improve under the enacted budget.