CBC’s new brief, “Steep Incline and Cliffs Ahead: Unaffordable NYS FY 2024 Spending Proposals Put Future at Risk,” finds that spending proposed by the Executive and both legislative houses would drive a huge $15 billion to $20 billion structural budget gap, setting the stage for damaging service cuts or counterproductive tax increases.

New York State’s budget has been growing at an incredible and unsustainable rate—12 percent this year and more over the past three years than it did over the previous nine—risking future stability.  

As federal aid is exhausted, temporary tax increases sunset, and gap-narrowing prepayments vanish, the added recurring unfunded annual spending—$2.4 billion by the Executive and an additional $3.9 billion by the Legislature—will likely destabilize the State’s finances. 

This year’s budget proposals by the Governor, Senate, and Assembly not only fail to address the State’s precarious fiscal outlook but make it worse. 

CBC found that: 

• State Operating Funds (SOF) spending grew $23.8 billion from fiscal year 2020 to fiscal year 2023, eclipsing growth of $19.8 billion over the prior nine years, when adjusted for timing shifts and spending moved off budget; 
• Adjusted SOF spending is slated to increase 12.2 percent between fiscal years 2022 and 2023; 
• The Executive Budget proposes to increase spending 3.6 percent in fiscal year 2024 and 4.3 percent annually thereafter, driven by the addition of $2.4 billion in new, recurring spending; 
• The Legislature proposes to add $3.9 billion in annual spending to adjusted SOF above the Governor’s proposal; 
• Accelerating spending growth widens budget gaps to $7.2 billion under the Governor’s proposal and $10 billion under the Legislature’s proposal by fiscal year 2027; and 
• The State’s structural gap widens to $15 billion under the Governor’s proposal and nearly $20 billion under the Legislature’s proposal, absent the non-recurring benefits of billions of dollars in federal COVID-19 aid, prepayments, and expiring temporary taxes. 

To close gaps and build fiscal stability, CBC recommends that the fiscal year 2024 enacted budget: 

• Restrain SOF spending growth to 2 percent annually; 
• Allow temporary tax increases to sunset as scheduled (or earlier); 
• Maintain or expand the Governor’s Rainy Day reserves plan; 
• Publish basic financial plan tables with the enacted budget; and 
• Reform the State’s budgeting and fiscal management to improve services, stability, and accountability. 

Read the full analysis and recommendations here.