June 25, 2003
Comptroller warns of 'huge' budget gaps
The state faces "huge" budget gaps in the future because the state's 2003-2004 budget, although balanced, made already big gaps in out-year budgets even larger, a new report from state Comptroller Alan Hevesi concluded.
"With the Legislative session now over, it is crucial for the executive and the Legislature to start now to develop a plan to deal with those large gaps in future years," the comptroller said. Since the budget was enacted, the state's fiscal condition has worsened, he added.
The legislative budget "did not address some of the serious problems in the executive budget as submitted in January, including out-year gaps, over-reliance on one-shots, and borrowing to pay for operating expenses." In, fact the legislative budget increased future-year gaps, the report said.
The report said that the Governor's executive budget included gaps of $3.9 billion in 2004-05 and $4.8 billion in 2005-06, based on the most current analysis by state Division of the Budget. The Legislature added $1.4 billion in 2004-05 and $2 billion in 2005-06, so the state faces gaps estimated at $5.3 billion in 2004-05 and $6.9 billion in 2005-06, the report said.
"Unfortunately, the Legislature has increased those gaps because the revenues it added decline and then sunset, while the expenses it added remain and in some instances grow. The Governor and the Legislature must start now to address these huge gaps," Hevesi said.
The state may end the current fiscal year with a balanced budget or a surplus of up to $1 billion if the recent federal aid package of $1.4 billion is considered. New revenue initiatives in the budget, including video lottery terminals, tax collections on Indian reservations, Sunday liquor-store sales, and others, may not raise the $493 million projected by the Legislature, but "they should produce some revenues," the comptroller's release said.