Comptroller Thomas DiNapoli generally offered praise to Gov. Andrew Cuomo’s budget balancing skills. He did, however, raise concerns not only about the lack of transparency in the budget, but also some risky revenue stuffed into the $132 billion plan.
“The Executive Budget contains a number of projections that should be considered uncertain, not only because of a vulnerable economy, but also
because of other variables,” DiNapoli’s review of the budget states.
Among the projections noted by DiNapoli:
—Insurance Conversion Proceeds: – The proposed budget anticipates $250 million in the 2012-13 fiscal year, increasing to $300 million annually for the conversion of HIP and GHI, not-profit insurance companies, to for-profit status.
“The conversion process has, in the past, proven lengthy, and funds have not been realized as expected in prior financial plans,” DiNapoli said.
—Public Authority Transfers: The budget relies nearly $100 million in non-recurring revenue from various public authorities to support the
proposed spending plan. This includes the transfer of $65 million in “voluntary contributions” from the New York Power Authority.
—Lottery revenue: The budget expects a 5 percent increase in lottery revenue in the 2012-13 fiscal year, to nearly $2.2 billion, mainly through new revenue from the Aqueduct racino. Revenue from traditional lottery sales continue to slump, though, and required a $128 million bailout from the state’s general fund.
—Native American casino revenue: The budget anticipates $125.5 million in the current fiscal year from the three western New York casinos owned by the Seneca Indian Nation. Next year’s budget estimates $129.3 million, but the tribe continues to withhold the aid—more than $300 million since 2009—because they believe their gaming compact is being violated because of the state’s three racinos in western New York.
—Growth in Income-Tax Revenue: The current budget initially projected a lofty 7.9 percent growth in income-tax revenue. Recently, the state lowered the estimates to 6.8 percent—and that includes an adjustment to account for December’s deal to keep higher income taxes on the wealthy. If it weren’t for the millionaires’ tax, the growth would have been 5.7 percent. The 2012-13 state budget estimates a more modest growth of 4.3 percent from the 2011-12 estimates.
—- State Operations: The budget expects to reduce agency costs by more than $1.1 billion, making up a bulk of the $2 billion remaining budget deficit for the 2012-13 fiscal year. That’s on top of the $1.4 billion in agency and workforce savings expected in the current year.
DiNapoli said: “There is a lack of specificity as to how these savings will be achieved, and the anticipated impact of these reductions on programs and services is unclear.”