The update reduces revenue projections by $850 million this year, and by another $850 million in each of the next two years, mostly as a result of an estimated $750 million drop in annual personal income tax receipts.
As a result, the projected fiscal 2019 budget gap has now ballooned to between $1.7 billion the largest prospective budget shortfall Cuomo has faced since his first year in office.
If the adjusted revenue estimates are correct, the fiscal 2019 budget can still be balanced without tax hikes if Cuomo holds spending growth to about 0.5 percent, or about $500 million. However, given rising fixed costs in other areas, including pensions, health benefits and other “general state charges,” this would require a freeze or reductions in most programs.
In the nearly 10 months since Cuomo presented his FY 2018 Executive Budget, the DOB’s projection of fiscal 2018 tax revenues has fallen by $2.5 billion, while projected state operating funds spending (unchanged in the latest plan update) has risen $823 million.
As usual, the Mid-Year Financial Plan was behind the schedule dictated by the state Finance Law. The next statutory deadline on the fiscal calendar is November 15, when representatives of the governor, comptroller and legislative leaders are required to meet publicly “for the purpose of jointly reviewing available financial information to facilitate timely adoption of a budget for the next fiscal year.”