Almost all of the newly projected $2.1 billion deficit in this year’s New York State budget can be traced to falling tax receipts.  But rising spending will represent a growing share of the problem over the next three years.  In fact, more than one-third of the projected growth in next year’s gap, and over half the growth in the gap for fiscal 2013, can be traced to spending increases beyond those forecast by the Division of the Budget (DOB) just three months ago.

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Given recent revenue trends, it should come as no surprise that the state’s first-quarter financial plan update is forecasting a  $2.1 billion deficit for the current fiscal year.   But some of the financial details released by the Division of the Budget (DOB) today are getting even more worrisome.

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Writing in today’s FT, investment-banking veteran (and former New York bailout-facilitator) Felix Rohatyn and ESC consulting-firm president Everett Ehlrich, pointing out that states still face $200 billion in operating deficits in the next three years, suggest a repeat of February’s economic stimulus. (more…)

A new report out from the state’s Financial Control Board (FCB), which reviews New York City’s finances, shows the updated value of New York’s projected costs over time for providing healthcare to retirees.

This liability has grown by 36 percent in the three years since the city has had to report it, and will near the $100 billion mark in less than a half decade. (more…)

Classic cartoon characters have an entertaining knack for suspending the basic laws of physics–for example, when Wile E. Coyote propels himself in pursuit of the Road Runner through the use of a sail “pushed” by a fan strapped to his back.  So perhaps that was coyote logic at work in yesterday’s news release from the advocacy group Single Payer New York, hyping a state-sponsored Urban Institute study of options for expanding health insurance coverage in the state.  The advocates said the study showed that a government-funded health insurance program in New York would “save” $20 billion–a claim dutifully highlighted in various news accounts.

(c) Warner Bros.

Free health insurance for all New Yorkers–and at a lower cost, too?  There’s only one way to describe this.

In fact, on closer inspection, the Urban Institute analysis suggests a single-payer plan would require the state government to assume responsibility for an additional $57 billion in health insurance now financed by employers and individual New Yorkers.  Total annual spending on health care under the new, 100 percent government-funded program would be a whopping $86.3 billion—$2.5 billion more than the current system (see chart on page 16 of this summary).   And, keep in mind, this estimate reflects optimistic assumptions about the ability of a state-run plan to save money through “lower payment rates to providers and lower administrative costs,” no doubt assisted by Giant Rubber Bands from the Acme Corp.

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In his annual report to the state’s Financial Control Board yesterday, Mayor Bloomberg offered this intriguing fact: “the labor force is growing faster in New York City than elsewhere in the country. Our growth - at 1.6 percent - is nearly twice that of the nation’s at 0.7 percent.” (more…)

Five months ago, Brooklyn/Queens Rep. Anthony Weiner made sure that everyone knew how hard he had fought to include $1 billion in money for the nation’s police officers in the $787 billion federal stimulus package.

Now it turns out that President Obama is leaving New York out of the list of cities and towns that will get a piece of that funding.

According to the Post, the Justice Department “figures the most deserving cities are facing serious budgetary problems and fighting high crime rates. New York has a low crime rate, big police force, and stable budget, the feds reasoned.” (more…)

In remarks accompanying his annual city budget report, Comptroller (and mayoral candidate) Bill Thompson said that the city’s tax revenues have “evaporated.”

After a 37 percent decline in personal-income tax revenues over two years, these revenues won’t return to 2008 levels for five years, the comptroller’s staff projects.

Has NYC started to cut spending in line with diminished expectations? If you’re in a hurry, the answer is no, but some details are below. (more…)

New York led the nation in K-12 education spending per pupil in 2006-07, according to new data released today by the U.S. Census Bureau.  The Empire State’s school spending of $15,981 per pupil was 65 percent above the national average of $9,666.  New York’s total school spending of nearly $51 billion was exceeded only by California, which has more than twice as many students.

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The question is posed by a story in today’s Syracuse Post Standard that deserves national attention. Money graf:

The National Institutes of Health, the country’s top research agency, is awarding recovery money to projects proposed long before the recession. With $8 billion extra dollars to spend on research, agency officials went back to the list of projects that had been turned down.

They looked for projects that could be done in two years, with no special emphasis on job creation and no requirement that the scientists buy equipment made in America.

Scientists whose ideas did not make the cut last year are answering surprise telephone calls from government officials, announcing the projects would be funded after all.

It seems rejected research ideas conveniently translated into “shovel-ready” research ideas.