$2.1 Billion in Revenue Above Expectations Projected for Each of the Four Years of the Plan
Governor Directs $1.1 Billion to Reserves this Year as COVID-19 Variants Spread
Risk Remains as COVID-19 Variants Threaten Economic Reopening
New York State Governor Kathy Hochul today announced the release of the first quarter update to the New York State Financial Plan, which shows the state in a strong fiscal position as economic growth beats expectations with revenues projected to be an additional $2.1 billion higher in each of the four years of the plan. As a result, the plan is balanced in the current year and next, and budget gaps through Fiscal Year 2025 are reduced by nearly $2 billion.
At the Governor's direction, this year $1.1 billion of this additional revenue will be placed in reserves and $650 million is designated to reduce borrowing for capital projects.
"While the state's fiscal picture is strong, which is an incredible reversal from where we were a year ago, we must act with caution as the Delta variant of COVID-19 continues to spread, threatening our economic recovery," Governor Hochul said. "For this reason, I am bolstering state reserves to protect against economic downturn and new costs while creating capacity for the state to meet future infrastructure needs, all critical to protecting New Yorkers and our economy from the ravages of the pandemic and moving New York forward."
The State Financial Plan, which projects revenue and spending over a four-year period, projects all funds spending for Fiscal Year 2022 at $209.5 billion, a 0.3 percent increase from the Enacted Budget Financial Plan released in May with federal funding for rent relief coming in $300 million more than expected and labor settlements reached with the Public Employees Federation. All funds revenue receipts are projected at $215.3 billion, a 0.7 percent increase reflecting the $2.1 billion in revenue coming in above expectations.
At the time the Budget was enacted, the Financial Plan showed gaps in FY 2024 of $1.4 billion and $2 billion in FY 2025. The updated first quarter financial plan released today shows a gap of $247 million in FY 2024 and $1.2 billion in FY 2025, a reduction of nearly $2 billion over the two years. The budget is balanced in FY 2022 and FY 2023.
In the current year, the newly recognized revenue will fund $1.1 billion added to reserves, including a reserve to fund potential labor settlements and agency operations following 10 percent recurring budget cuts implemented in FY 2021, $650 million to reduce borrowing for capital projects, and the remaining funds will support prior year costs of the recent labor settlement with the Public Employees Federation.
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