CBC’s NYS Budget Outlook finds that the Fiscal Year 2025 Budget is buoyed by higher projected tax receipts, but the additional funds still leave large annual budget gaps and a substantial structural budget gap. Specifically, CBC finds:

• Out-year gaps of $5.0 billion to $9.9 billion are significant—even after savings proposed by the Governor—and unlikely to disappear even if economic growth is greater than projected; and
• The State is facing a $16.4 billion structural gap in fiscal year 2028, once the use of nonrecurring resources to fund recurring spending is taken into account.

Governor Kathy Hochul’s proposed budget does start to rein in spending, but more needs to be done. Even with the good news of extra revenue, it would be unwise to add any spending that in any way increases the state's already large structural budget deficit. To put New York on solid fiscal ground, increase transparency, and strengthen the State’s economic competitiveness, CBC makes seven recommendations.

• Restrain spending growth, ideally to 2.0 percent annually, which would close projected gaps, stave off a fiscal reckoning, and achieve structural balance by fiscal year 2028; 
• Do not increase taxes, since our nation-leading taxes risk competitiveness for residents and businesses; 
• Deposit the additional fiscal year 2024 closeout surplus to the Rainy Day Reserve and make further structural improvements to reserves; 
• Publish basic financial plan tables with one-house and enacted budgets; 
• Rein in Medicaid spending growth by targeting savings in high-growth areas such as home- and community-based care, and by prioritizing enrollees with high needs and services with high impact benefits; 
• Limit school aid spending growth by adopting the Governor’s proposal to eliminate hold harmless provisions, and target resources to districts and students with rising needs; and 
• Enact policies that boost housing production and reject those that disincentivize new housing.