Today, Governor Andrew Cuomo is scheduled to release the Mid-Year Update to the FY 2017 Financial Plan (Update). The Update reports changes to receipts and disbursements in the current fiscal year and also provides estimates for ensuing fiscal years. The Update sets the stage for the budget-making season in January; the Legislature reviews the Update and releases its own reports on or around November 5. Here is a list of things to look for:

1. Are revenue projections down again?

   Since the Legislature adopted the 2017 budget for the fiscal year starting April 1, 2016, fiscal year tax revenue projections were decreased by $497 million in May and an additional $626 million in August. Nevertheless, personal income tax collections have continued to fall short of projections, coming in $423 million below the plan through the end of September, albeit with offsetting above-expected collections in other taxes. Total receipts were still $338 million below updated projections. Does the State's reliance on volatile personal income and business taxes result in further reductions in revenue projections?

2. Is economic development spending reduced?

   In light of recent corruption charges related to economic development projects, responsibility for overseeing certain projects will shift from the State University of New York to Empire State Development. Does the State take this opportunity to fully evaluate economic development spending and cut less desirable projects?

3. What is the full impact of collective bargaining agreements?

   The Governor recently announced a collective bargaining agreement with the Public Employees Federation (PEF), covering fiscal years 2017 to 2019, with 2 percent raises in each year. Assuming this sets the pattern for other bargaining units, personnel costs would increase by at least $260 million in 2017, $520 million in 2018, and $780 million in 2019. Can the financial plan accommodate raises without increasing total personnel costs? Are personnel expenses growing to include raises for all bargaining units now that a pattern has been set?

   The announcement also called for PEF and the State to "work together on a plan to reduce out-of-control healthcare costs." Are these savings identified and included in the Update?

4. Can Medicaid growth continue to be restrained?

   The adopted budget included a global Medicaid growth cap of 3.4 percent. The most recent financial plan update lowered the 2018 global cap forecast to 3.2 percent, based on medical inflation. While the Medicaid Redesign Team has been very successful to date, fully implementing its strategies will be increasingly challenging. Can the growth in Medicaid spending continue to be slowed, even as more individuals enroll?

5. Do minimum wage increases related to State contracts cost more than expected?

   The Administration initially said increasing the minimum wage would not "have a material impact on State costs." However, after the proposal was adopted, the Enacted Budget Financial Plan included $19 million in "minimum wage increase" costs in 2017, growing to $588 million by 2020. The increase in the minimum wage will begin at the end of 2016 and be implemented in varying phases over the following six years, with faster implementation in New York City. Are cost estimates rising as implementation approaches?

6. Are future budget gaps continuing to grow?

   Projected deficits have increased with each update to the State's financial plan: the fiscal year 2018 gap grew from $2.6 billion in May to $3.2 billion in August. This is largely caused by recurring spending added by the Legislature, but also by slowing tax collections. Does the trend continue? Absent other off-setting measures, the impact of the recently negotiated collective bargaining agreements and revenue shortfalls could balloon the 2018 deficit to more than $4 billion.