Tax Shortfalls Widen New York's Revenue Gap
16 Febbraio 2019 - 4:31PM
Dow Jones News
By Jimmy Vielkind
Gov. Andrew Cuomo proposed moving money between state accounts
and other one-shot actions to cover up a $2.6 billion state revenue
shortfall, according to a budget update.
Mr. Cuomo, a Democrat, announced this month that the state's
estimated income tax payments around the turn of the calendar year
were $2.3 billion behind projections -- a result of poor
performance in the stock market and, the governor said, the
migration of wealthy New Yorkers in response to the 2017 federal
tax law. The higher figure includes an additional shortfall in tax
withholdings.
The amended budget released Friday proposed to cover this gap by
recalling $750 million of cash that had previously been earmarked
for capital expenditures, using $316 million in monetary
settlements won from financial firms, $632 million in sweeps from
other programmatic funds, $499 million in reduced payments for
local assistance and $177 million in savings from state agency
operations.
The size of the budget gap in the coming fiscal year, which
starts April 1, increased from $4.6 billion when Mr. Cuomo proposed
his budget in January to $5.9 billion in the latest projections. To
cover the wider gap, Mr. Cuomo lowered by $550 million the planned
increase in Medicaid spending and booked other operational savings,
including the closure of up to three prisons.
The amended budget sets even tighter parameters for negotiations
between Mr. Cuomo and state legislators over the coming weeks. The
governor is resisting calls from his fellow Democratic lawmakers to
raise taxes and increase spending on education and other
programs.
And after criticism at a public hearing, Mr. Cuomo added more
meat to his proposal to implement a system of congestion pricing
for vehicles that enter the core of the city. The governor and
officials at the Metropolitan Transportation Authority hope such a
system will raise enough money to fund $15 billion for capital
improvements through 2024.
The amendments propose the creation of a "capital lockbox" to
hold any funds, and says the tolls on vehicles entering Manhattan
south of 60th Street will be variable. They will be set by a new
panel of six experts, but Mr. Cuomo's amendments do not specify who
will appoint them.
The budget amendments also task MTA officials with developing a
restructuring plan. Mr. Cuomo has previously said the additional
funds for the beleaguered authority should only be authorized if
its structure is streamlined.
The amendments specifically call on the MTA to use design-build
contracting on major capital improvements and would change the
terms of MTA board members so they aligned with the politicians who
recommended them.
(END) Dow Jones Newswires
February 16, 2019 10:16 ET (15:16 GMT)
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