State comptroller: Pandemic will punch $4B hole in revenue
ALBANY — Rocked by economic fallout from the COVID-19 health emergency, New York is facing a sharp drop in revenue collections, a trend that could become “significantly worse,” state Comptroller Thomas DiNapoli warned Tuesday.
DiNapoli, the state’s chief fiscal watchdog, estimated the state is facing a drop in revenues that will be $4 billion at a minimum and as much as $7 billion below what had been envisioned by budget planners just prior to the New York outbreak of the virus.
DINapoli also warned the state treasury could be battered by the potential for a “deep recession” later this year.
The comptroller’s latest analysis injected a new level of worries into state budget talks at a time when the Cuomo administration is trying to realign the Medicaid health care program to contain spending and close a budget gap of $6 billion.
Lawmakers are scrambling to enact a balanced state budget by the end of this month. The next state fiscal year begins April 1.
Meanwhile, the filing deadline for both state and federal personal income tax returns is April 15.
Robert Mujica, a Cuomo appointee who heads the state Division of the Budget, said New York is going to need financial help from the federal government.
“The federal government will have to step in here because we will have our own liquidity issues if we don’t get some relief,” Mujica said at a press briefing led by Cuomo.
Progressive activists, citing the calamitous impacts from the virus epidemic, urged Cuomo and lawmakers to embrace higher taxes on the wealthiest New Yorkers. A group of 34 multi-millionaires, including philanthropist Abigail Disney and AT&T Broadband executive Leo Hindery Jr., argued a “more equitable tax structure” is needed to adequately fund education, health care and human services and address infrastructure and technology needs.
Another measure, advanced by Assembly Republicans, would provide state assistance to small businesses and workers that have suffered financial losses since the state economy abruptly worsened.
Assembly GOP Leader Will Barclay said the legislation would create a program offering zero-percent interest loans while redirecting $890 million in a reserve fund to small businesses.
Barclay also called for channeling all economic development discretionary funding to New York’s small businesses.
On another front, state officials, under pressure from the manufacturers of plastic bags, agreed to delay enforcement of New York’s new ban on single-use plastic shopping bags until May 15. The industry has argued the ban on disposable bags has elevated the risk of spreading the virus.
Concerns over the financial impacts from the pandemic also prompted Attorney General Leticia James and the Cuomo administration to immediately suspend collections of delinquent student and medical loans.
“In this time of crisis, my office will not add undue stress or saddle New Yorkers with unnecessary financial burden,” the attorney general said.
Joe Mahoney covers the New York statehouse for CNHI’s newspapers, including the Press-Republican of Plattsburgh.