State budget deficit balloons to $8.2 billion
ALBANY — Gov. David Paterson announced Wednesday that the state’s budget deficit for the coming fiscal year was $750 million higher than projections just two weeks ago, largely because of lower than expected income-tax revenue from Wall Street and higher Medicaid costs.
The estimates bring the state’s deficit for the 2010-11 fiscal year, which starts April 1, to $8.2 billion, up from $7.4 billion when Paterson introduced his budget proposal Jan. 19.
Paterson said the new numbers further indicate the need for fiscal restraint. He has proposed cutting aid to schools and health care as ways to help close the gap, along with about $1 billion in new taxes.
“My partners in government are going to have to learn that we’re going to have to be talking about reductions rather than restorations,” he said.
Comptroller Thomas Di-Napoli painted an even gloomier picture.
He said Paterson was overestimating revenue and predicted the state would end the current fiscal year March 31 with about a $1 billion deficit, double what Paterson has estimated.
DiNapoli said that personal-income tax collections through the first nine months of the fiscal year declined more than 15 percent from the same period last year, lower than Paterson’s projections.
He said state spending over the next five years was expected to grow by 33.6 percent while revenues were projected to grow by only 12.2 percent.
