[NYAPRS Enews] NYS Comptroller Predicts $3.8B More in State Tax Receipts, McConnell Considers Federal COVID Relief

[Harvey Rosenthal]

NYAPRS Note: Thankfully, New York's revenue picture has brightened with the Governor's new projections of an additional $3.8 billion in tax receipts. At the same time,  Senate leader Mitch McConnell has indicated a willingness to pass a long-awaited federal COVID relief bill with funding for hard pressed states and localities, if only to get ahead of what could be a even bigger spending package if the previously resistant Republican controlled Senate turned Democratic blue in advance of the start of the Democratic Biden Administration.
NYS behavioral health advocates and our national groups are continuing to urge Congress, the Governor and state legislators to provide the cumulative funding to make behavioral health funding whole and to put a moratorium on any future withholds or cuts. Stay tuned....

that might obviate withholds and/or cuts from the Cuomo Administration

may be in the offing, via action either in the coming month or after the Biden Adminisration

DiNapoli Predicts $3.8B More in State Tax Receipts<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3Daec5aeba-2Df15e97ab-2Daec7578f-2D000babd9fe9f-2Dc53b9973ee483dc4-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253De4057c6ca9-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=ZBtQxr3uIhjV2Sdk98IlyNgZgOSDaXT6UMqDyGwoNBM&e=>
E.J. McMahon  Empire Center  November 9, 2020

New York State's tax receipts in the current fiscal year will exceed Governor Cuomo's latest projections by $3.8 billion-still down from last year, but a big improvement over the governor's worst-case scenario-according to updated estimates from state Comptroller Thomas DiNapoli's office.

DiNapoli's revenue projection<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3D336fdd53-2D6cf4e442-2D336d2466-2D000babd9fe9f-2Dbb627e865dacccb8-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253Dacdc1252aa-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=djQ-AzzvPxQ6s-JkE2uwLuCAxdmQM44MoIDmpL_fggM&e=> isn't simply speculative; it's grounded in actual tax collections through September, which were a not-insignificant $1.1 billion above the amount most recently projected by Governor Cuomo's Division of the Budget (DOB). The comptroller's office also projects that state revenues will exceed the latest DOB projections by $4.1 billion in fiscal 2022, which begins next April 1, and $3.5 billion in fiscal 2023.

Personal income taxes account for roughly two-thirds of the added revenue projected by DiNapoli, or $2.4 billion this year, with the rest coming from sales and use taxes.
If DiNapoli's report is right, the state's current-year budget gap is barely half the $8 billion reflected in DOB's Mid-Year Financial Plan update last week<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3D6ebb2bd7-2D312012c6-2D6eb9d2e2-2D000babd9fe9f-2D8d17de6a8b9a5473-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253Dc60df040e0-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=XWLrag7bUrfVHOoUl_erSaBk9i4hvEdLItzWX0hH_d0&e=>. The remaining gap of $4.2 billion is, if anything, probably smaller since DOB has yet to detail the net budget savings generated by $5.1 billion in federal Coronavirus Relief Fund aid sent to the state under the CARES Act last spring.

Projecting further ahead, DiNapoli's estimate implies the budget gap for fiscal 2022 is $12.6 billion, rather than the latest DOB projection of $16.7 billion. The reduced out-year gap is still a massive problem, by historical standards, to be sure-but a $4 billion improvement is a big number even by New York budget standards.

...For much of the summer, into fall, the governor assumed there would be bipartisan agreement on a new stimulus bill including state and local governments. When that didn't materialize, his hopes turned to the Biden victory and blue wave takeover of the Senate and House.<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3Dac00aa7c-2Df39b936d-2Dac025349-2D000babd9fe9f-2D3a170cb2543abf7a-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253D09e6efc683-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=CafkL9e4ukgpXRc_92AUOTfjjgqnxzNOK2WZ3AgLRfM&e=> While not final, the national election result at this writing is shaping up as a narrow Biden win, and a significant reduction in the House Democrats' majority.<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3D7199f341-2D2e02ca50-2D719b0a74-2D000babd9fe9f-2D8bdfa4c6ed9d0048-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253Db1248e2057-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=51r7BR2fagkIXMFkERC0B6DS6C-MghKj47IHVYorFwY&e=>

Political control of the U.S. Senate is likely to be determined by the outcome of early January runoff elections for both of Georgia's Senate seats<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3Dfed69cee-2Da14da5ff-2Dfed465db-2D000babd9fe9f-2Df80a2548b790efcb-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253D7eae4bc4ac-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=YGOeJB6oCrXlQKYvOMXHQMYGNNWDWEz_eTXdvYG69So&e=>. No doubt with that election in mind, Majority Leader Mitch McConnell is now saying he wants to pass a stimulus bill in a lame-duck session in December;<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3Df274f762-2Dadefce73-2Df2760e57-2D000babd9fe9f-2D2c6196023b9afa01-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253Dd588110448-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=m_YsdWE60jY4MbrRCOjJi8KFVLK_6vth3c4qyoBW2_Q&e=> in that case, if House Speaker Nancy Pelosi is willing to make a deal, the final bill is likely to include at least some of the unrestricted state and local budget aid that the Senate's Republican fiscal hawks previously had blocked-with inevitable short-term benefits for New York. But, still, Cuomo cannot count on that happening.

Not so "quick" start
The comptroller's revenue and disbursement estimates report was filed yesterday-the annual Nov. 5 deadline by which the so-called "Quick Start" provision of the Budget Reform Act of 2007<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3D4143339e-2D1ed80a8f-2D4141caab-2D000babd9fe9f-2Df2a736ec6542e18d-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253D80c97bc174-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=2xZtGkLnTFOI_cbDoBmnUJVxIGdRwpQxfxB1TYvtNAA&e=> (Section 23.5 of State Finance Law<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3De6fae595-2Db961dc84-2De6f81ca0-2D000babd9fe9f-2D400eab550781a5e8-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253D7cc151e3ca-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=yFsmeruA9ONDt8fKOtGg9dd3SMx9B9Mr3RgmXzR9cEA&e=>) requires "appropriate personnel" for the governor, comptroller and legislative leaders to "separately prepare and make available reports on estimated state receipts and state disbursements for the current and ensuing fiscal years."

In recent years, only DiNapoli has met this deadline<https://urldefense.proofpoint.com/v2/url?u=https-3A__protect2.fireeye.com_v1_url-3Fk-3D37490d01-2D68d23410-2D374bf434-2D000babd9fe9f-2D3d7170fa60e6ea89-26q-3D1-26e-3D29c8af36-2D251c-2D4f4f-2D8cf4-2Dc0c409437159-26u-3Dhttps-253A-252F-252Fempirecenter.us9.list-2Dmanage.com-252Ftrack-252Fclick-253Fu-253D53df267ce8a623c9b36c8c2e0-2526id-253D6cb3619d0f-2526e-253D863d97202f&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JcZseEMR8oua53sbfso6Mxq8nPlZ0Gmz9HLUtrXMnOU&m=RNWkalhWPmRRbCABMxr35a9ROKxJLYkGMd7n5QMr0v4&s=AkiXHhQBM09nXoCJ_YUZt-wUJBz6bbQBjVTaWJ1JOFg&e=>-which the Legislature has routinely ignored. Next up: by Nov. 15, the same law requires representatives of the governor, the Legislature and the state comptroller to hold a public meeting "for the purpose of jointly reviewing available financial information to facilitate timely adoption of a budget for the next fiscal year," which begins April 1.
That deadline also has been annually ignored by the Legislature and Governor Cuomo for years now.
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