The coming 2012-13 fiscal year deficit could take a bigger hit due to declining revenues and the rough economic terrain here in the U.S. and across the globe, Comptroller Tom DiNapoli warned in a report issued today.

While DiNapoli’s office believes any current year leak could be easily plugged, out-year gaps are expected to increase by 1.5 billion. For the coming 2012-13 fiscal year this deficit already estimated to be as high as $2.4 billion.

Gov. Andrew Cuomo’s budget office is yet to release a mid-year budget update, citing the ongoing economic violatility, particularly in the eurozone.

The current 2011-12 fiscal year budget reduced spending for the first time in 15 years and closed a $10 billion deficit without raising taxes. But Cuomo has locked himself into a 4 percent increase on the two most expensive areas of the budget, education and health care, for the coming fiscal year, which begins April 1.

And DiNapoli uses the report to note that the PIT surcharge on those making $200,000 and more is due to expire at the end of the year, further eroding the state’s revenue. Cuomo, along with Senate Republicans, oppose keeping the surcharge — a position that is coming increasingly underfire by liberal lawmakers.

Collections over the remainder of the year will be negatively impacted by several tax law changes, including the loss of the Personal Income Tax surcharge on high income earners and the partial restoration of the sales tax exemption on clothing items. In the last quarter of the current State fiscal year, for example, withholding collections are expected to be reduced by more than $1.0 billion because of the tax law changes. In addition, several variables, including the very volatile and uncertain euro zone debt crisis, a gridlocked domestic political environment, high unemployment, and the struggling housing market, increases the difficulty of forecasting State tax collections. Close monitoring is critical to ensure that actual results comport with projections.

The job outlook, meanwhile, remains muddled. The report says New York’s job gorwht has slowed, with a 2.6 percent increase in private sector jobs seen since January 2010. Government jobs have declined by 22,600 or 1.5 percent.

2011 Quick Start

Share|