New York's Comptroller Says Deficit Could Be $4-7 Billion Higher Due To Coronavirus
ALBANY, NY (WSKG) - The New York State comptroller said the state’s revenues are plunging, along with the stock market, and that spells a difficult time ahead for the New York budget.
State Comptroller Tom DiNapoli was asked by Gov. Andrew Cuomo to recalculate the state’s finances, and he said the picture does not look good. He said the current $6 billion deficit will grow to $10 billion-$13 billion.
“This is an extraordinary time that we are going through, and it makes estimating the revenue impact of the pandemic very, very difficult,” DiNapoli said.
DiNapoli said the impacts of the virus on the economy and state revenues are currently “unknowable” and added that “most available economic forecasts have not yet caught up with recent events.”
Among the many uncertainties: Will the April 15 tax collections be down, as people and businesses find they are unable to file their taxes on time? DiNapoli said if that occurs, the state could experience a cash flow problem in the billions of dollars.
The mandatory casino closures enacted March 16 will also reduce revenues. Sales tax collections are also likely to be reduced, with bars and restaurants shut down and few customers at most retail centers.
The New York State Restaurant Association is urging the state to delay sales tax revenues due this Friday.
“The state’s entire restaurant industry is in dire straits. From the North Fork of Long Island to North Tonawanda, restaurants are closed and, undoubtedly, many will never reopen," said Melissa Fleischut, NYSRA President & CEO.
"During this uncertain time, these businesses still have obligations that must be met – such as payments to suppliers, rent and taxes – with little to no revenue coming in. We urge the State to push back the due date for sales tax payments to alleviate the financial burden on these businesses. Without this, hundreds of thousands of restaurant jobs will be in further jeopardy.”
The comptroller said New York’s financial picture could improve, though, if the federal government comes up with a substantial bailout package for the states and to boost the economy.
“Perhaps beyond the relief that’s currently being debated, there will be stimulus money that will be additional money that’s not quantified at this point,” said Di Napoli, who said Cuomo and lawmakers may have to do a “baseline budget” and consider revisions later.
For that reason, Cuomo’s budget director, Robert Mujica, said the administration might ask the Legislature for greater flexibility, so the governor could, on his own, make more fiscal decisions later in the year.
“You’ll have to do a budget that has flexibility,” Mujica said. “To be able to make changes as you go. We don’t know how long this is going to last.”
Mujica said for instance, the budget office might need to hold payments back at times, or change or increase health care payments as the year goes on.
Cuomo said he and lawmakers will have to make the tough decision to “pick a point in time” and decide on a spending plan.
“If the revenues continue to slow, which I believe they will, that you have a self-adjustment mechanism in the budget,” Cuomo said. “So you don’t have to come back every 24 hours to readjust the budget when the revenues shift.”
In a statement, the Republican minority leader in the Senate, John Flanagan, called on the Legislature to enact a bare-bones state budget. He said lawmakers should leave out, for now, many proposed additional items, like legalizing adult use of recreational marijuana.
Flanagan is against the idea of granting Cuomo new budget-making powers. He said the Legislature should “not simply hand over all oversight of potential decisions to the executive” in the budget, and should instead periodically revisit the budget to potentially make changes in the coming months.
Mike Whyland, a spokesman for Assembly Speaker Carl Heastie, said the Assembly wants to see the specific bill language that the governor is proposing before making any comment.