New York State is facing a $36 billion budget gap over the next four fiscal years, according to a new warning from New York State Comptroller Thomas DiNapoli.
Just three months after the state legislature enacted the FY 2023-24 budget, DiNapoli's office warns of "looming gaps" totaling $36.4 billion through the state fiscal years of 2026-27.
A decline in revenue from a weaker economic forecast, stock market volatility, and recurring spending increases are the reasons for the bleak outlook.
“The state’s fiscal outlook has changed considerably over the past year, and significant economic and fiscal risks could further upend the state’s finances,” DiNapoli said via a press release.
“The Governor and the Legislature prudently increased New York’s reserve funds, but that cannot replace fiscal discipline or be relied upon to plug recurring budget gaps. While there is no quick fix, a proactive approach by state leaders to align recurring revenues with recurring spending could help preserve the economic competitiveness of our state and avoid cuts to critical programs New Yorkers rely on”, DiNapoli added.
To address the issue, the comptroller has recommended transferring $13.2 billion in fund balances, designated by the state Division of Budget for “economic uncertainties”, money controlled by the governor, to the statutory rainy day reserves on a monthly basis over the course of the fiscal year. "...the Executive should develop and clearly state criteria for using the funds designated for “economic uncertainties”, the report states.