Last week, State Comptroller Tom DiNapoli released the state’s October cash report, which found that state tax collections fell $170.8 million below July estimates and $259.8 million below initial estimates.
According to the Comptroller, in order for the state to keep its books balanced, tax collections will have to grow 5.1% in the last five months of the fiscal year, which ends March 31. However, his report does not reflect the loss of tax receipts resulting from Hurricane Sandy, which hit the New York City region on October 29. The lost tax revenues and higher expenses that result from the storm are expected to further reduce the state‘s tax receipts and lead to higher expenses.
Clearly, New York State is not even close to being on a sound fiscal footing. 2013 will be yet another year of little or no growth in terms of state tax revenue. We have to make sure that we continue on our current path of fiscal responsibility, and do not fall into the trap of overspending (and overtaxing) that New York has succumbed to before.