Andrew M. Cuomo, Governor
Mary Beth Labate, Budget Director
The State Division of the Budget today released the Mid-Year Update to its FY 2012 Financial Plan. This update revises the state’s budgetary projections for the current year through FY 2015 based on a review of current financial data and operations.
Weak and unsettled economic conditions around the world — illustrated by the Eurozone financial crisis, volatility in the financial markets, and persistently disappointing data on employment, consumer confidence, and income — have darkened the State’s fiscal outlook. The significant positive receipts results early in the fiscal year have been largely eroded as the economy weakened in the summer months. With the prospect of a weak bonus season on Wall Street, even more negative pressure is being placed on the State’s receipts outlook.
Based on comprehensive review of these factors, as well as actual operating results, updated program data, and other factors, the Division of the Budget (DOB) estimates that the General Fund has a budget shortfall of $350 million in the current fiscal year. To eliminate the shortfall, DOB will immediately institute a fiscal management plan. If it appears that the savings from the management plan will be insufficient to eliminate the shortfall, the Governor is expected to call the Legislature into session to consider additional actions to achieve a balanced budget in the current fiscal year.
The same adverse economic factors have increased the size of the projected budget gap that must be closed in FY 2013. DOB now estimates that the gap for FY 2013 is in the range of $3.0 billion to $3.5 billion. The Governor will propose an Executive Budget for FY 2013 that will eliminate the gap.
DOB will have a better sense in coming weeks of the magnitude of the receipts decline as more data becomes available and we coordinate our analysis with the Legislature.
A copy of the full report is available at www.budget.ny.gov.