In a new report, New York Comptroller Tom DiNapoli says the state is in its best fiscal shape in years. It closed out the previous budget cycle with a balance of $2.2 billion, and had millions to set aside in a rainy day fund for the first time since 2008.
Analyzing the nearly $143 billion state budget for the fiscal year that started on April 1, the comptroller finds the Governor and legislators are using some creative accounting to balance the budget.
What it is: The state paid more than $700 million in debt service and personal income tax refunds before the fiscal year started.
What it means: The state was financially healthy enough to pay some of its bills ahead of time. Doing so helped the state stay within the two percent spending cap imposed by Governor Cuomo. If it hadn't, the state would have exceeded the cap.
What it is: The Fiscal Year 2015 budget uses money outside the general fund pay for programs. About $115 million is coming from the Mortgage Insurance Fund to pay for housing and homelessness programs and grants to Yonkers and Rochester. Another $90 million is coming from the New York Power Authority (NYPA) for economic development projects.
What it means: Taking money from the Mortgage Insurance Fund and NYPA — not the general fund — keeps it outside the spending cap. Paying for these programs through the general fund would have made it harder to stay within the governor's limit.
What it is: The budget counts on more than $7 billion in temporary resources, including $2.7 billion in federal aid for Sandy recovery efforts and implantation of the Affordable Care Act. There’s also another $2.1 billion from the expiring millionaires' tax and $1 billion that's being shifted away from the State Insurance Fund, which covers workers' compensation. That money is now going to the general fund to cover state operating expenses.
What it means: The state changed its accounting rules last year so that it could use the insurance fund money to help balance the budget. But that money will run out after next year. Meanwhile, the millionaires' tax is set to expire, and Sandy aid will eventually dry up. As a result, the state will have to look for new ways to plug its budget holes going forward.
What it is: The budget includes $7.6 billion dollars in new debt. Voters will decide whether to increase debt to pay for school technology and some Pre-K classrooms through the Smart Schools Bond Act. But most of the new debt will be borrowed by public authorities.
What it means: Unlike the Smart Schools initiative, borrowing by public authorities doesn't have to be approved by voters.
An Aspirational Surplus
What it is: Governor Cuomo says a $2 billion surplus is allowing for a series of tax cuts.
What it means: While sticking to the two percent spending cap should lead to a surplus over time, DiNapoli says that not sticking to the cap would lead to $7 billion gaps in just three years.