NYS Division of Budget
Andrew M. Cuomo, Governor
Robert L. Megna, Budget Director
Entire Five-Year Financial Plan (PDF, 3.60MB)
The Financial Plan provides greater detail about the budget, including revenue initiatives, savings initiatives, reserves, debt, and more.
The Governor introduced the Executive Budget for 2010-11 on January 19, 2010. The Executive Budget eliminates a General Fund budget gap estimated at $7.4 billion in 2010-11. The following Overview provides an explanation of the current-services budget gaps in the General Fund, the highlights of the gap-closing plan, the impact of the plan on fiscal measures, and an assessment of risks to the Financial Plan.
In the Mid-Year Update to the Financial Plan (October 2009), DOB estimated a General Fund budget gap of $3.2 billion in the current year. The Governor proposed a Deficit Reduction Plan (“DRP”) to eliminate the gap. The proposed DRP included actions that could be implemented administratively and actions that required the approval of the Legislature.
In December 2009, the Governor and Legislature approved a DRP that provided an estimated $2.7 billion in 2009-10 savings (including approximately $800 million in savings from administrative actions), leaving a deficit of $414 million. (See “Deficit Reduction Plan” herein.)
As part of its quarterly updating of the Financial Plan, DOB has also made several substantive revisions to the current-services forecast for the current year that, taken together, increase the estimate of the General Fund deficit by $86 million (to a total of $500 million). The estimate for tax collections has been reduced by $203 million, based on collections experience to date, and the estimate for Medicaid expenditures has been increased by $350 million, based on an increase in weekly payments to providers and updated enrollment data. These increases are offset by lower estimated spending across a range of programs and activities. The table below summarizes the changes to the 2009-10 forecast since the Mid-Year Update.
| 2009-10 | |
|---|---|
| MID-YEAR UPDATE (OCTOBER 2009)1 | (3,159) |
| Approved Deficit Reduction Plan (Dec. 2009) | 2,745 |
| State Agency Reductions | 454 |
| Aid to Localities Reductions | 629 |
| All Other Actions | 1,662 |
| Forecast Revisions | (86) |
| Tax Receipts 2 | (203) |
| Miscellaneous Receipts | 78 |
| Spending Revisions | 39 |
| ESTIMATED CARRY-FORWARD OF 2009-10 DEFICIT | (500) |
1. Excludes impact of any Deficit Reduction Plan actions, including administrative actions.
2. Excludes impact of debt service re-estimates.
After accounting for the DRP and the forecast revisions, the General Fund has an estimated deficit of $500 million remaining in the current fiscal year.1 Rather than proposing additional gap-closing measures in the current fiscal year, when the range of options for achieving recurring savings is increasingly limited, the State expects to carry the deficit forward into 2010-11, and address it in the Executive Budget as part of a responsible multi-year plan that emphasizes recurring savings.2 The State expects to end 2009-10 with a cash balance of $1.4 billion in the General Fund, after carrying forward the deficit, including $1.2 billion in the State’s rainy day reserves. (See “Fund Balances” herein.)
The General Fund had a projected current-services budget gap of $7.4 billion for 2010-11.3 The current-services gap for 2010-11 has increased by $622 million compared to the Mid-Year forecast. The growth in the gap is due to the $500 million deficit that is expected to be carried forward from 2009-10 into 2010-11, as described above, and a number of current-services revisions based on updated information. The latter include a reduction in projected tax receipts in 2010-11, based on updated economic data and collections experience ($502 million); a change in the timing (from 2010-11 to 2011-12) of estimated receipts related to conversions of health insurance companies to for-profit status ($242 million); and the elimination of a requirement for motorists to renew their license plates ($93 million). These reduced receipts are offset in part by downward revisions to the spending estimates for school aid, based on the latest database update, and for a number of other programs, based on updated program data and spending trends.
| 2010-11 | 2011-12 | 2012-13 | 2013-141 | |
|---|---|---|---|---|
| Mid-Year Budget Surplus/(Gap) Estimates2 | (6,796) | (14,775) | (19,520) | |
| Current-Services Revisions | (122) | 464 | 1,189 | |
| Tax Receipts | (502) | (160) | (41) | |
| School aid – Database Update | 372 | 389 | 468 | |
| Employee Pension Contribution | 0 | 186 | 402 | |
| All Other | 8 | 49 | 360 | |
| Remaining Carry-Forward Deficit from 2009-10 | (500) | |||
| Current Services Surplus/(Gap) Estimates | (7,418) | (14,311) | (18,331) | (20,713) |
| Four-Year Total Gap (2010-11 through 2013-14) | (60,773) | |||
1. The 2013-14 gap estimates are published for the first time in the 2010-11 Executive Budget.
2. Before the impact of DRP savings approved in December 2009.
As the preceding table shows, the current-services gap in the General Fund nearly doubles between 2010-11 and 2011-12, increasing from $7.4 billion to $14.3 billion. This is caused in large part by the expiration, at the end of calendar year 2010, of Federal stimulus funding4 for Medicaid, education, and other governmental purposes, which is expected to result in approximately $4.4 billion in costs reverting to the General Fund, starting in 2011-12. The annual growth in the gap is also affected by the sunset, at the end of calendar year 2011, of the temporary PIT increase enacted in 2009-10, which is expected to reduce 2011-12 receipts by approximately $1 billion from 2010-11 levels.
1 By law, the General Fund is considered “balanced” on a cash-basis of accounting, if at the end of the fiscal year, all planned payments, including tax refunds, have been made without the issuance of deficit notes or bonds, and the balances in the Tax Stabilization Reserve and Rainy Day Reserve have been restored to the level they were at the start of the fiscal year.
2 In practice, the State expects to carry the deficit into 2010-11 by not making certain payments that had been scheduled in 2009-10 but are not due by law until 2010-11. For planning purposes, the Financial Plan assumes this will be done through the management of tax refunds.
3 The current-services gap represents (a) the difference between the General Fund disbursements, including transfers to other funds, that are expected to be needed to maintain current-services levels and specific commitments, and the expected level of resources to pay for them, plus (b) the operating deficit projected in HCRA, which helps finance a number of State health care programs, including a share of the Medicaid program. It does not reflect the benefit of actions taken in the DRP or proposed in the Executive Budget.
4 The American Recovery and Reinvestment Act (“ARRA”) enacted in February 2009.