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April 30, 2012


DiNapoli: 2011-12 Year-End Budget Results Show New York Reducing Structural Gaps, But Challenges Remain

New York State ended its 2011-12 fiscal year having achieved major reductions in structural budget gaps, even in the face of unexpectedly weak economic conditions, but continues to face significant budgetary challenges in the years ahead, according to a report released today by State Comptroller Thomas P. DiNapoli.

"While the state is in a significantly better fiscal position today than at any time in recent years, history has shown that can change rapidly," DiNapoli said. "The economy has been recovering, but at a much slower pace than expected. Last fiscal year, the state experienced a great deal of volatility and state tax collections fell short of projections in seven of the last twelve months. We must carefully monitor the immediate revenue and spending trends, while further addressing the long-term gaps that remain."

Statutory limits on spending growth in Medicaid and school aid, other spending reductions made during the year, and revenue increases enacted in December boosted the state's long-term fiscal outlook and helped it maintain favorable cash-flow conditions during the year, according to DiNapoli's report.

Tax receipts ended the year $233 million below the most recent projections made in February and $677 million below initial projections – a shortfall that would have been larger if not for the December tax code changes. State fiscal year 2011-12 was the fifth consecutive year in which tax receipts trailed initial expectations and budget gaps arose during the fiscal year.

Overall, tax collections increased by $2.9 billion, or 4.8 percent, from adjusted 2010-11 results, primarily because of strong PIT settlement results in April 2011. However, in conjunction with reduced economic forecasts, year-end tax revenue projections were reduced by the Division of the Budget (DOB) by a total of $444 million to $64.5 billion between the 2011-12 Enacted Budget Financial Plan and the Third Quarter Update to the 2011-12 Financial Plan.

The General Fund ended 2011-12 with a balance of $1.79 billion. This was $410.6 million more than the balance in 2010-2011, and $111.7 million more than projected in the last Financial Plan Update.

DiNapoli's report found:

  • While PIT collections were projected to rise 6.4 percent, actual growth for 2011-12 was only 5.6 percent, $290 million below initial projections, for a total of $38.8 billion. Actions taken in December 2011 to amend the tax code were expected to increase 2011-12 PIT collections by $385 million. Without that additional revenue, year-end PIT collections would have been $675 million less than initial projections.
  • DOB estimated business tax collections would rise 12.3 percent, or $894 million, from the previous year, but actual collections grew only 8.2 percent to a total of $7.8 billion, and were $43 million below the latest projections and $295 million below initial projections.
  • Through the first eight months of 2011-12, collections from consumption and use taxes, primarily sales tax, exceeded collections from the previous year. However, beginning in December 2011, monthly collections began to decline in comparison to the previous year. Year-end collections were $366 million, or 2.6 percent, higher than 2010-11 for a total of $14.6 billion, but $102 million less than initial projections, which projected year-end growth of 3.3 percent.
  • The Financial Plan projected that spending would decline by 0.8 percent from 2010-11 to $131.7 billion, with reductions coming primarily in education and health. Actual results show spending totaled $133.5 billion in SFY 2011-12, an increase of 0.6 percent, primarily due to the timing of certain Medicaid payments.

A copy of DiNapoli's complete report on the year-end results for fiscal year 2011-12 can be found at:


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