The New York State Senate Finance Committee and Chairman Carl Kruger released the Senate’s annual Economic and Revenue Forecast for SFY 2010-11, a comprehensive perspective on the performance of the national and State economies using most recent data available. The report is released in conjunction with the Economic Consensus Forecast Conference which will occur Thursday, February 25th at 1 PM in Room 124 of the Capitol.
Download the full report at http://www.nysenate.gov/report/economic-and-revenue-forecast-sfy-2010-11.
The Senate’s report, utilizing Global Insight data, emphasizes the difficulties which continue to face the state, national and global economies. With effects of the Federal stimulus packages making their way through the economy, economic growth began to return in the second half of 2009, increasing by 2.2 percent and 5.7 percent, in the 3rd and 4th quarters, respectively.
However, data indicates growth in the national economy for 2010 slightly weaker than that forecasted by the Executive, leading to revenue projections well below those presented by the Division of the Budget and employed in his Executive Budget proposal. The difference in projections for New York are due to the stronger than expected personal income but weaker than projected employment.
In all, General Fund revenue projections are $403 million below the Executive’s for SFY 2010-11. Additionally, the Senate projects $340 million less for SFY 2009-10 than the Governor has estimated. Two-year General Fund receipts are forecasted $743 million below the Executive’s projections, while All Funds tax revenues are projected to be $294 million below the Executive’s for SFY 2010-11 ($502 million over two-years).
“While certainly not yet where we’d like our economy to be, there is very good reason to believe economic revitalization will continue through 2010,” said Finance Committee Chair Carl Kruger (D-Brooklyn). “The importance of reliable projections to the budget cannot be dismissed. Data indicates the Governor’s spending proposal is nearly half a billion dollars off already, which could lead to additional unexpected and devastating mid-year cuts to program. To maintain economic growth, our report provides accurate data to determine where spending is appropriate and where cuts must be made.”
“New York State, like much of the nation, faces an insecure financial future,” said Senator Liz Krueger (D-Manhattan). "We have high unemployment, inadequate tax collections, and a structural budget imbalance. While the housing market collapse and “Great Recession” are the immediate cause of the current budget crisis, some of the problems have much deeper roots. To solve these problems for the future we have to deal with the chronic structural deficits in New York State’s budget and the ways in which our budget process contributes to our fiscal problems."
“This report demonstrates what families at kitchen tables across the state already know: our economy isn’t working for regular New Yorkers. Years of high taxes, special interest spending, and borrowing against our future has left the state on the brink of fiscal disaster. That era is over,” said Senate Majority Conference Leader John L. Sampson. “The Senate Majority will create jobs, control spending, and provide relief to overburdened taxpayers. We will use these new revenue projections to avoid the reckless spending mistakes of past leaders, and build a new, sustainable economy that gets New York working again.”