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December 6, 2011

The tentative tax-hike package (updated**)

E.J. McMahon

Governor Andrew Cuomo and legislative leaders have just announced a deal on a major increase in the state income tax rates compared to what is scheduled under current law — i.e., the official breaking of the Cuomo promise not to raise taxes.

A quick look at the new bracket structure [*updated from official version to tell the full story] for married-joint filers (single filer income levels are one-half):


November 22, 2011

Cuomo’s “super committee” super hype

E.J. McMahon

Governor Andrew Cuomo is making a big deal out of the failure of a congressional “super committee” to produce a deal on reducing the federal budget deficit. This is supposed to trigger $1.2 trillion in across-the-board federal budget cuts over a 10-year period beginning in 2013—which, Cuomo said yesterday, could translate into $5 billion in lost federal funding for New York.

Bemoaning “Washington’s inability to get its fiscal house in order,” the governor warned:  “These events, combined with a stagnant national economy and the expanding fiscal crisis in Europe that has led to a sudden and severe decline in revenues for the state, have dramatically changed the fiscal course of the state.”


November 1, 2011

The debtor state

E.J. McMahon

New York is at the top of the debt list in the latest U.S. Census data on state and local government finances.

As of 2009, New York’s state and local long-term indebtedness came to $15,202 per-capita, more than any state and 74 percent above the national average. In 2008, New York’s per-capita state and local debt load was $13,804 and ranked third, trailing only Alaska and Massachusetts.

Comparatively speaking, state and local debt in New York wasn’t much lighter when measured as a share of income, coming to $326 per $1,000 — 45 percent above average and narrowly trailing only Alaska. In the debt per $1,000 category, the Empire State’s #3 ranking was unchanged.

Tables based on the newly released 2009 Census data on state and local government finances have been updated at the Empire Center’s Data Bank.

August 18, 2011

DiNapoli: State fiscal margin “tight”

E.J. McMahon

New York State’s tax collections and other receipts during the first four months of the 2011-12 fiscal year were $330 million below projections, according to the July monthly cash report issued yesterday by Comptroller Thomas DiNapoli.  That dip, he noted, “largely evaporates” the bulge in tax collections during the first three months of the year.


Filed under: The Fiscal Outlook

August 15, 2011

NY’s double-dip risk

E.J. McMahon

“If the plodding national economy stumbles into another recession, New York — plagued by high unemployment and the prospect of a rising tide of layoffs on Wall Street — probably will take a tumble, too.” That’s the main takeaway from an article in today’s New York Times on the outlook for the city’s economy — which, of course, has inevitable implications for all of the Empire State.


August 11, 2011

The stock market and state revenues

E.J. McMahon

The gyrations on Wall Street are casting a cloud over New York State’s financial projections. Governor Andrew Cuomo’s 2010-11 Executive Budget, unveiled in February, assumed stock values would grow this year by 13.4 percent. This assumption was not changed in the Enacted Budget Financial Plan in April.  As of 1 p.m. today, however, the S&P 500 was 3.4 percent below its level at the start of the year.


August 3, 2011

State finances: still in the tunnel

E.J. McMahon

The image on the cover of New York State’s first quarter financial plan update is obviously meant to convey the sense that there’s not only a light visible at the end of the budgetary tunnel, we’re just about to emerge into broad daylight. But the report itself, released late yesterday by Governor Cuomo’s Division of the Budget (DOB), doesn’t “update” much at all, suggesting the state is parked in that tunnel.

Two weeks ago, the comptroller’s cash report revealed that state tax receipts were $800 million above forecast during the three months ending June 30, and spending was well below projected levels during the period.

The latest DOB financial plan pours cold water on any celebrations these numbers may have sparked. The trends, it says,  “are believed to be timing-related and do not provide a basis for revising the annual estimates of receipts or disbursements at this time.” For example, it notes that state health care spending in the first quarter was nearly $600 below the April projection due to “timing changes of certain Medicaid managed care premium payments ($280 million), the required repayment of Federal overpayments associated with inpatient rate packages ($177 million), and processing delays of public health reimbursement to counties and providers for claims submitted under various programs ($135 million).”


July 29, 2011

More on those state tax receipts

E.J. McMahon

When New York State’s first-quarter tax receipts came in nearly $800 million above the 2011-12 financial plan forecast last week, I warned in this space that the anemic 1 percent year-to-year quarterly growth in personal income tax (PIT) withholding payments was “grounds for concern” about the state’s economic outlook.  On closer inspection, however, it turns out the quarterly withholding number was a bit misleading.

According to sources in the state Department of Taxation and Finance, withholding collections back in April 2010 were inflated by some unusually large payments by a few large employers.  Sure enough, PIT withholding receipts for April 2011 were actually 8 percent lower than the previous year, pulling down the total for the entire quarter ending June 30.


July 28, 2011

Promises, promises

E.J. McMahon

And speaking of debt: in its latest report on the newly adopted New York City budget, the state Financial Control Board says the city’s unfunded liability for “other post-employment benefits” (OPEB) could approach $100 billion in three years. As shown in the nearby chart, the city’s OPEB burden has been rapidly escalating since the number was first calculated and made public in 2006.

Employer-sponsored health coverage after retirement, common in the public sector, is available to only a small and dwindling number of private-sector workers, as noted in a recent post here on state labor agreements. New York City’s burden is especially heavy because (a) it offers relatively generous health insurance plans, and (b) it does not require its employees to contribute to their own coverage. The city would save $2 billion by 2015 if it reformed employee health coverage to require contributions by active and retired employees, the Citizens Budget Commission has estimated.  But that would require major concessions by municipal labor unions — which, under current city and state collective bargaining guidelines, are in a strong position to resist any change.


July 20, 2011

Tallying Albany’s revenues

E.J. McMahon

New York State’s 2010-11 2011-12 fiscal year appears to be off to a good start. Tax collections for the first quarter of the year were nearly $800 million above Governor Andrew Cuomo’s initial budget projections, according to the June cash report posted today by state Comptroller Thomas DiNapoli.

On the other side of the ledger, disbursements for April through June appear to have been about $1 billion below projections.  Significantly, this includes lower-than-forecast spending of $260 million on Medicaid, an area over which the governor now (temporarily) enjoys unprecedented administrative control. The spending figure needs to be taken with a grain of salt, however.  DiNapoli said spending was below projections “primarily because of the timing of local assistance payments.” County executives around the state already have been complaining that Cuomo’s Division of the Budget (DOB) has been slowing down aid payments to an extraordinary degree.


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