Uh-oh, state revenues coming up short

Wednesday, May 20th, 2009 at 3:49 pm by

Yesterday, State Comptroller Thomas DiNapoli issued his monthly “cash report” for state government for April.  He announced that general Fund revenues came in $239 million (almost 5 percent) below levels projected for the the budget enacted that same month.

The Governor’s Office initially minimized any concerns, noting that spending was also below projections, by $179 million, putting overall state finances about where projected.

But today, the Governor indulged in some thinking out-loud to speculate that the Legislature may need to consider mid-year budget cuts of as much as $3 billion.  Then his office downplayed the the Governor’s comments as just a guess.

The report itself does not present any information or speculation on whether either the revenue or spending shortfalls might reflect payment timing issues, and thus might materialize later and make the overall outlook better or worse than reported yesterday.

Some media sources also note that the Comptroller reported that state spending on education in April was up 24 percent from 12 months before.

What is important to recognize is that April 2009 spending on school aid was set in last year’s budget.  While state fiscal years run from April through March, school aid and school district fiscal years run from July through June.  April 2009 school payments fall in the final quarter of the 2008-09 school fiscal year and were set by legislation enacting the 2008-09 state budget.

The large increase in education spending over April 2008 reflects a combination of a near record state aid increase enacted one year ago, plus cost over-runs.

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