Albany's April Revenue Fell 44% From 2008

NYS Arts offered the following article by Jeremy W. Peters relating that less than two months into the state's fiscal year, revenue collections are about half of what they were last year, according to a report issued by the state comptroller on Tuesday.

The findings reinforced what seemed to be a foregone conclusion almost as soon as Gov. David A. Paterson and legislative leaders agreed last month to the state's $131 billion budget: Lawmakers will need to return to Albany at some point this year to make further cuts.

The comptroller's report said the state collected $4.8 billion in revenue in April, compared with $8.6 billion collected in April 2008, a 44 percent decline.

Collections missed the revenue forecast the governor's office had issued just three weeks ago by nearly a quarter of a billion dollars. The comptroller, Thomas P. DiNapoli, said that while it was too soon to say for certain whether the budget would have to be reopened, the outlook was not encouraging.

"If you look at the most optimistic projections, which call for a rebound in the third or fourth quarter, it's going be a very tight budget picture," he said. "Until we start to see some upturn in overall economic activity, the expectation should be that revenues are going to continue to be off.

"The revenue numbers, which include income taxes the state collected around the April 15 deadline, reflect the toll the recession has taken on New Yorkers' personal finances. The state collected $2.9 billion in personal income taxes in April, a 49 percent decline from April 2008.The numbers do not reflect a vast majority of the new and increased taxes and fees approved in the budget that will finance state operations through next winter, a fact the governor's Division of the Budget pointed out on Tuesday. The state began assessing higher personal income taxes on the highest-earning New Yorkers at the beginning of May, and that revenue will not begin showing up on the balance sheets until late May or early June. All told, the new and higher taxes and fees are expected to bring in more than $5 billion a year.

A spokesman for the Budget Division, Jeffrey Gordon, said the state's finances were not as perilous as the comptroller's report suggested, in part because adjustments to spending had been made in anticipation of the drop in revenue.

"The state's finances are in line with the fiscal plan, since decreases in projected revenues were largely offset by decreases in spending," Mr. Gordon said.

The budget the Democratic-controlled Legislature enacted and Mr. Paterson signed was widely criticized by Republicans and independent budget analysts as bloated and heavily reliant on temporary sources of revenue at a time when, they asserted, the state should be exercising fiscal discipline. Spending for 2009-10 rose more than 9 percent over the previous year when several billion dollars in federal stimulus money are included.

With his poll numbers at historic lows, Mr. Paterson has tried to position himself anew as a fiscal conservative. He recently called for a plan that would set mandatory limits on state spending. That plan, however, does not appear to be gaining much traction in the Legislature.

Reacting to Mr. DiNapoli's report, Democrats said that it was still far too early to tell whether the impact of the federal stimulus legislation was having any effect on the state treasury's bottom line.

"I think it would be unfair to say that in April's numbers you can see the trend for the year," said Senator Liz Krueger, vice chairwoman of the Senate Finance Committee. "The bad news, of course, is that we're down dramatically."