Bloomberg reports New York state’s budget gap could reach $3.b billion:
New York state’s projected deficit for the next fiscal year is expected to grow to as much as $3.5 billion as a stalled economic recovery cuts Wall Street jobs and shrinks bonuses, Governor Andrew Cuomo’s office said.
The gap for fiscal 2013 was projected at $2 billion when the current $131.7 billion budget was approved in March. It’s now estimated to have widened to between $3 billion and $3.5 billion, according to the Budget Division’s mid-year update released today by Cuomo’s office. The division also forecast a $350 million shortfall in the current year.
Please take note that Cuomo didn’t have to raise taxes, like Illinois, to close what was then expected to be a $10 billion gap:
Cuomo closed a $10 billion gap in the 2012 fiscal year budget without raising taxes. The 53-year-old Democrat used the threat of firings to get concessions from the state’s two largest public-worker unions as part of a push to save $450 million in employee costs.
Now check out Illinois, which has a smaller budget but an expected deficit twice as large as New York’s.
In all, the state will be $8.3 billion short on June 30 if nothing is done, according to the report. The majority of that money, roughly $5.5 billion, will come in the form of unpaid bills from companies that provide everything from meals for the elderly to toilet paper for prisoners. Another $1.2 billion is composed of Medicaid payments the state will push off until the next budget year, while the remaining $1.6 billion is owed to companies for tax returns and health insurance bills for state workers.
New York is a blue state, as is Illinois, but that hasn’t stopped New York from addressing its problems.