Last Tuesday, the state Division of Budget released its first quarterly update to the state’s 2013 financial plan. The update shows that the current state budget remains in balance, but that the projected budget deficit for the 2013-14 state budget has grown from $950 million to $982 million.
The Division of Budget also released documents this week showing that the state may hit its statutory debt cap (the cap congress imposes on outstanding public debt. Meaning no new debt issues may be sold once the cap is reached) in 2014. The state debt limit was enacted in 2000, but has been phased in slowly. The cap limits state debt at 4 percent of personal income in the state, and 5 percent of all fund receipts for debt service.
In fiscal 2013, New York expects to issue $5.4 billion of debt, an increase of 15 percent ($696 million) from fiscal 2012. In fiscal 2013, New York will have $54.5 billion of outstanding state-supported debt. The debt cap does not apply to borrowing by public authorities.
Two on-time, fiscally responsibly budgets notwithstanding, New York State government is not anywhere close to being out of the fiscal woods. This report shows that we are still looking at a budget deficit next year, and that we have a long way to go before our state budget is sound.