This past year, New York faced extraordinary fiscal challenges as a result of the economic downturn, the failure to exercise budgetary restraint during more prosperous times, and the failure to act quickly when the State’s finances began to show signs of difficulty, as well as the collapse of the stock market through 2002 and the devastation, both in human and financial terms, of 9-11.
At the end of the 2003-2004 fiscal year, the State’s General Fund was able to report an operating surplus of $3 billion, largely as a result of using the proceeds of tobacco bonds to pay operating expenses.
Last fiscal year, the process by which the budget was constructed improved immeasurably. The budget was passed in a timely fashion, and more legislators were involved in crafting the final product.
As the current administration ends its tenure, the State faces significant financial challenges. The 2006-07 enacted budget contains an estimated two-year budget gap of as much as $13.9 billion, with spending projected to grow twice as fast as revenues between 2005-06 and 2008-09.
New York faces considerable fiscal challenges that will require the State’s leaders to find creative and effective solutions in order to chart a positive course for the future. A well-planned, collaborative effort will help the State reverse patterns of unsustainable spending, rising debt levels and structural budgetary imbalances.
The State of New York faces serious fiscal challenges. Over the next few years, the State is projected to face annual budget gaps that combine to exceed $26 billion. For too long, New York’s budgets have contained spending commitments that dramatically outpace realistic revenue growth.
The State of New York continues to face serious challenges to its fiscal health. The State has continued on the unsustainable course of making recurring spending commitments that are not backed by recurring revenues, and it continues to rely heavily on debt.
New York continues to struggle with the fiscal challenges associated with the worst economic crisis since the Great Depression.
New York State has shown resilience in challenging times. While New Yorkers have been hit hard by the Great Recession, our past investments in infrastructure, facilities for culture, education and recreation, a well-educated workforce, innovative businesses, progressive human services organizations, and a world-leading financial sector provide a sound foundation for a return to prosperity.
In the past few years, New York State has made important progress toward achieving long-term budget balance. The State has enacted significant changes in its three largest expenditure categories — Medicaid, school aid and agency operations — and created a new cap on local property taxes, ushering in a new era of State and local fiscal policy.
