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To help fill in some of the details that have been missing during the budget battle the past few weeks, the Citizens Budget Commission has tallied the impact of both the legislative actions taken already and those expected to be taken to close the $8.6 billion budget gap. The results of a preliminary analysis - shown in the table below - reveal an estimated remaining budget gap of $465 million. About $300 million in possible revenue and spending "re-estimates" and some miscellaneous items may be applied to get the rest of the way there.
To date initiatives that will close the budget gap are estimated to total $8.1 billion. Between the recently amended revenue bill that the Legislature could take up soon, and the items approved in other bills, such as the cigarette tax, the revenue package agreed to by the Legislature totals $1.5 billion. With the Governor's stated intent to use his veto stamp - and its initial application to the school aid restorations - the estimated value of the spending reductions is $4.6 billion. Other actions - including one-shots, federal aid, and the ill conceived plan to defer state employee pension fund contributions - total $2.0 billion.
However, sizeable risks remain in the plan. Targets for recouping Medicaid fraud and collecting sales tax on Indian reservations have fallen short in the past, as have efforts to reduce the size of the State workforce through early retirement. Lobbying of federal officials to pass an extension of the relief aid for Medicaid may or may not be successful as the federal budget comes under greater pressure from other expenses. Accounting for these risks, the size of the current year deficit could reach $2.4 billion with no downward changes to revenues. Future years are also at risk as tax credits deferred temporarily come due.
What is clear, therefore, is that more work may need to be done to balance this year's budget - particularly with the late start of some initiatives. A tax on sugary beverages and wine sold in grocery stores and/or another round of spending cuts could still be needed. Legislators may leave town soon, but they should keep their overnight bags packed for a return to Albany before election day.
By Elizabeth Lynam
(Click on image above to enlarge)