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For Release — Thursday, November 7, 2002

PUBLIC POLICY INSTITUTE LAUNCHES BUDGET WATCH '03,
REPORTS ON ISSUES RELATED TO STATE'S FISCAL CHALLENGE

ALBANY—The Public Policy Institute of New York State has launched Budget Watch '03, a new series of reports on the fiscal and public-policy challenges state lawmakers will face in creating a state budget for 2003-2004.

The first report in the series, which documents the roots of New York's looming fiscal challenge in state spending patterns, was released today by The Institute, which is the research affiliate of The Business Council. The report can be found at www.ppinys.org/budget/budget_watch_03_issue1_spending.pdf.

"In Albany, when the fiscal going gets tough, the spenders get going," said Business Council President Daniel B. Walsh. "We hope this series of reports can help lawmakers resist the temptation of short-term stopgaps that are long-term folly."

"These new reports will enrich the current policy debate with some badly needed perspective on what policies have worked in similar circumstances and what ones have backfired."

The Institute will release new reports in the series twice a week in the weeks ahead as the state budget debate unfolds. The one-page reports will be sent to state lawmakers and their key staff members, to news media state wide, and to Council members. All reports in the series will be posted at www.ppinys.org/bwatch03.htm.

'The fiscal problem in a word: spending': The first report focuses on how unrestrained state spending in recent years has created the likelihood of a budget deficit next year widely projected at least $5 billion.

The report noted that state-funds expenditures (which is total state spending minus federal funds) have risen from from under $45 billion five years ago to $59.4 billion. "That's a staggering increase of 32 percent, more than twice the rate of inflation for state and local government services," the report said.

The report also noted that projections of a gap for 2003-2004 are based on an assumption that state spending will again see another robust increase: $2.3 billion, or 5.8 percent. Those estimates are part of the 2002-03 Executive Budget, and they do not reflect spending additions included in the fiscal plan actually enacted.