New York

Public finance

New York State has the 2nd-largest budget (behind California) of all states in the US. The New York State budget is prepared by the Division of the Budget and submitted annually by the governor to the legislature for amendment and approval. The fiscal year runs from 1 April to 31 March.

The 2000/01 state budget announced tax cuts of $6.8 billion over a period of five years (adding to a cumulative total, including previously enacted tax cuts, to more than $100 billion over the same time period), while attacking the state debt and increasing reserves. The 2000/01 budget included more than 30 tax cuts totaling nearly $1.4 billion in new tax relief, including the elimination of taxes on energy for industry and business, a college tuition deduction, and the elimination of the sales tax on the transmission and distribution of gas and electricity for commercial customers. In 2002/03, however, much of this had to be reversed. Fiscal 2002, a turbulent year financially for most states, presented New York with particularly serious challenges as it was impacted by the collapse of the stock market boom, the national recession, the trauma of 9/11, and on-going problems in the financial services sector. To help close the budget gap that emerged in 2001/02 from lower-than-expected revenues and increased costs, $578 million in cuts were made in the budget after it was enacted. New York also raised its sales tax rate (from 4% to 4.5%), raised taxes on cigarettes and gasoline, increased a number of fees (projected to produce additional revenue of $435.4 million in 2002/03, and $471.6 million in 2003/04), made spending cuts, instituted a hiring freeze and early retirement programs to cut the number of state personnel, and made a number of administrative adjustments to save money, including restructuring the state's debt to take advantage of lowered interest rates, and made other administrative adjustments to save money. The government also secured the future proceeds from the New York's share of the tobacco settlement, estimated to raise $3.8 billion in revenues for 2003/04. In 2002/03, the state budget deficit was estimated at $2.5 billion (about 6.3% of total expenditures), and for 2003/04, the budget deficit was projected at $7 to $10 billion (17% to 24.3% of total expenditures) In the enacted state budget for 2003-04, General Fund disbursements totaled $40.84 billion, up$1.32 billion or 3.4% from 2001/02-03. Decreases in expenditures for state operations and higher education were more than offset by increases for Medicaid, welfare, public health, pensions and insurance. The largest appropriations were for school aid (30.1%); state operations (17.6%); Medicaid (15.4%); general state charges (7.8%); higher education (3.6%); handicapped/other education (3.2%); welfare (2.8%); and public health (1.4%). The General Fund constitutes approximately 41% of all state disbursements, and receives almost all state taxes and other resources not specifically dedicated to other purposes. For 2003-04, 68% of the enacted General Fund budget was for local assistance, 18% for state operations, 8% for general state charges, 4% for debt service, and 2% for capital projects and other expenditures.

The following table from the US Census Bureau contains information on revenues, expenditures, indebtedness, and cash/securities for 2001.

New York

  ($000) PERCENT PER CAPITA
Population (thousands, 2001) 19,084 (X) (X)
Total Revenue 112,438,570 100.00 5,891.77
General revenue 91,801,777 81.65 4,810.41
Utility revenue 2,985,298 2.66 156.43
Liquor store revenue
Insurance trust revenue 17,651,495 15.70 924.94
Exhibit: Salaries and wages 12,005,091 11.26 629.07
Total expenditure 106,598,603 100.00 5,585.76
General expenditure 89,236,585 83.71 4,675.99
Education 23,568,538 22.11 1,234.99
Public welfare 32,220,931 30.23 1,688.37
Hospitals 3,281,523 3.08 171.95
Health 4,249,606 3.99 222.68
Highways 3,437,042 3.22 180.10
Police protection 496,925 0.47 26.04
Correction 2,566,911 2.41 134.51
Natural resources 427,800 0.40 22.42
Parks and recreation 535,208 0.50 28.04

New York

  ($000) PERCENT PER CAPITA
General expenditure (continued)      
Government administration 3,928,341 3.69 205.84
Interest on general debt 3,684,100 3.46 193.05
Other and unallocable 10,839,660 10.17 568.00
Utility expenditure 6,142,983 5.76 321.89
Liquor store expenditure
Insurance trust expenditure 11,219,035 10.52 587.88
Debt at end of fiscal year 80,384,892 100.00 4,212.16
Cash and security holdings 221,202,888 100.00 11,591.01