Economic Alert from Senator Aubertine: As Senate Works to Pass Fair Budget Fiscal Conditions Worsen
State revenue drops $3.2 billion in the last year; 39,000 more unemployment claims each week
ALBANY (March 25, 2009)—State Sen. Darrel J. Aubertine and his colleagues in the Senate Majority said today that projected State revenues have declined by $3.2 billion in the last year and new unemployment claims reached 39,000 per week in March 2009, an increase of more than 20,000 compared to one year ago.
“As you can see by the numbers that have been released, putting together this budget is really a moving target,” Sen. Aubertine said. “This economic crisis has hit all of New York and especially Central and Northern New York very hard over the last year. These latest numbers show our deficit is now more than $16 billion.”
The staggering loss in revenue is due to the increasingly unstable financial services sector and the worsening economic crisis affecting the nation and the State of New York. In February alone, private sector job losses totaled 660,000 and since the beginning of the economic downturn, over 4.5 million private sector jobs have been lost. The Gross Domestic Product has steadily plummeted, showing a steep decline in the fourth quarter of 2008 from -3.8 percent to -6.2 percent.
“We’ve said it from day one that this means that difficult decisions have to be made, but I’m still optimistic that we will be able to put together a responsible and timely budget,” Sen. Aubertine said. “We need a budget that will include spending reductions, but also continue to make critical investments in other areas, including education, agriculture and energy. This crisis is an opportunity to move toward real systemic changes that will help us put this state on the right track for recovery and growth.”
Significant declines in revenue are anticipated in the following areas: personal income taxes due to job losses and declining wages, sales taxes due to decreasing consumption, and business taxes due to reduced economic activity and profitability.
Senate Majority Leader Malcolm A. Smith said: “These numbers emphasize the troubling fiscal outlook for New York and should serve as a stark reminder of the economic challenges that lay ahead as we strive to change the structure of our State’s budget. By recognizing just how dire the economic conditions are, we can better prepare ourselves to build a new economy, one based on the principles of fiscal responsibility and prudent spending practices coupled with sound economic development and job creation.”