Reports

The Division of the Budget’s State Fiscal Year (SFY) 2023-24 Enacted Budget Financial Plan shows looming budget gaps totaling $36.4 billion through SFY 2026-27. The deteriorating fiscal outlook is rooted in several factors, including anticipated revenue declines from a weakening economy and a volatile stock market, and increases in recurring spending. State leaders must take action to align recurring revenues with recurring spending, with an eye toward preserving the economic competitiveness of our State and equality of opportunity for all New Yorkers.

State tax receipts totaled $27.6 billion through the first quarter of State Fiscal Year 2023-24, $450.8 million higher than estimates released in the Division of the Budget’s Enacted Budget Financial Plan. However, collections were $6.8 billion lower than last year through the quarter ending in June 2022.

The Climate Action Plan Progress Report for the New York State Common Retirement Fund highlights the Fund’s recent efforts to address climate risks and opportunities.

New York will receive nearly $665 million as part of recent federal investments to improve broadband data, affordability, access and availability. New federal funds present an opportunity for the State to improve the availability of reliable, high-speed service to unserved and underserved areas, and the State must now craft a plan that is ambitious, actionable and accountable for meeting this objective.

New York’s recreational adult-use cannabis market represents a new legalized industry and, as such, its development presents new and unique issues for local governments, particularly for the cities, towns and villages that will have marijuana retail dispensaries and consumption sites located within their jurisdictions. The purpose of this report is to briefly provide a background on the 2021 cannabis law, including its major components and actors, and to touch upon its financial and operational implications for local governments.

Local sales tax collections in New York State increased by 1.1% in May compared to the same month in 2022. This is the third consecutive month in 2023 of less than 2% growth. Overall, local collections totaled $1.71 billion in May, up $18.4 million compared to last year.

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Stronger-than-anticipated revenue and savings initiatives will allow New York City to maintain budget balance in Fiscal Year (FY) 2024, but the City faces significant financial pressures that are likely to exacerbate already large out-year budget gaps. Budget balance in FY 2024 comes as the City is returning to a revenue composition that more closely resembles pre-pandemic norms, moving away from reliance on federal relief aid.

For State Fiscal Year (SFY) 2022-23, agencies paid vendors $4,087,280 in interest, an increase of $3,081,904 (approximately 307 percent) from SFY 2021-22.

The New York State Minority- and Women-Owned Business Enterprise (MWBE) Asset Management and Financial Institution Strategy (Chapter 171, Laws of 2010) was enacted to codify and replicate best practices for providing MWBEs that are asset managers, investment banks and financial and professional service providers with the opportunity to offer services to fiduciary-controlled entities established by New York State law.

Of the total contracts reported by State agencies in 2022, 58 percent were processed after their start or renewal dates. This represents no change from 2021.

The number of New Yorkers earning less than $20,000 with a broadband subscription rose from 64% to 76% between 2019 and 2021 as a result of two federal programs created to address disparities in access to high-speed internet. More than 1.3 million New York households are receiving affordable broadband subscriptions with federal support. In total, more than 90% of all New York households had access to broadband in 2021, up from 86% in 2019.

Escalating debt service costs have long been a source of financial pressure at the MTA. The pandemic exacerbated these pressures causing ridership to drop and tax revenues to dry up. However, new sources of recurring revenue in the enacted State budget and other aid give the MTA an opportunity to ease the pressure that growing debt places on its operations and to stabilize its future finances.

The $229 billion Enacted Budget for State Fiscal Year 2023-24 includes new recurring spending for schools, mental health services, and health care, as well as resources for the Metropolitan Transportation Authority and for emergency rental assistance. While these and other measures will increase spending, revenues are projected to decrease for the second year in a row, as temporary federal aid is depleted and tax collections decline.

The unemployment rate for mothers in New York City has improved but it remains higher than it was prior to the pandemic. In 2022, 5.7% of City moms in the workforce were unemployed compared to 3.4% nationally. Black mothers in the City are the hardest hit, facing an unemployment rate of 9%. Some mothers in the City appear to be looking for flexible options outside full-time work, especially compared to the rest of the State and the nation.

Local sales tax collections in New York state increased by 1.5% in April compared to the same month in 2022. Overall, local collections totaled $1.74 billion, up $25.8 million compared to the same time last year.

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Overtime costs at State agencies rose 47.2% to more than $1.36 billion in 2022, setting a new record. Despite several efforts to bolster the workforce, including salary increases and bonuses for a range of positions including health care workers, attrition of the State workforce accelerated in 2021, and the number of State employees continued to drop in 2022. As the State workforce has been reduced, total overtime hours and earnings have increased.

The COVID-19 pandemic exacerbated pre-existing staffing pressures, particularly a shortage of staff nurses, in NYC Health + Hospitals (H+H) facilities, leading to an increased reliance on temporary nurses and higher staffing costs. This report includes a trend analysis of nurses in New York City and the rest of the State, challenges to hire more staff nurses nationwide and the experience of H+H nurse staffing during this time.

Local government sales tax collections in New York State totaled $5.5 billion in the first quarter of 2023, an increase of 7.1%, or nearly $369 million, compared to the same three-month period last year.

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New York’s Paid Family Leave (PFL) provides paid time off for eligible employees for bonding with a newborn, or newly adopted or foster child or to care for a family member with a serious health condition. Payments under PFL rose steadily between 2018 and 2021 as the amount of allowable time off and weekly cash benefits increased. Almost eight million workers were covered under PFL, with $872 million paid on approximately 156,000 claims in 2021.

As New York City’s overall taxable sales begin to normalize from their pandemic-fueled levels, various economic sectors, most notably leisure and hospitality, continue to recover their pandemic declines. As national retail sales growth slows from its double-digit pace of 2021, City retail sales and associated revenues could see a return to historical growth rates following the next two fiscal years.