Better-than-expected tax revenue and "found" federal aid could lead to modest budget surpluses for New York, Comptroller Tom DiNapoli found in a report on the state budget released on Tuesday, as the state's finances begin to recover amid the economic crisis created by the COVID-19 pandemic.
The news is being seen as a potential sign of an economic recovery in a state hit hard by the first wave of the pandemic a year ago. Businesses shuttered and schools closed, keeping many New Yorkers home in the process and spiking unemployment to Depression-era levels.
The state's unemployment rate has since recovered, but at 8.2% in December still remains at higher than the national average.
But as more tax revenue than expected begins to reach New York's coffers, there has been cautious optimism.
DiNapoli's report, analzying Gov. Andrew Cuomo's budget and amendments, pointed to the growing tax revenue and the federal aid for the potential to produce a $1.6 billion surplus in the fiscal year ending March 31. The coming fiscal year could result in a surplus of $676 million, DiNapoli found.
“One year after the first case of COVID-19 was confirmed in New York, we continue to suffer unimaginable losses. Too many families have lost loved ones, huge numbers of New Yorkers have lost their jobs and we are still dealing with the consequences of when our economy came to a standstill,” DiNapoli said.
“There are signs our economy is rebounding and the federal government will soon provide aid to suffering New Yorkers and devastated communities. But this recovery is fragile, and I urge state leaders to consider the long-term impact of this year’s actions to avoid tougher choices later.”
Cuomo is seeking $15 billion in direct aid from the federal government as part of the larger $1.9 trillion economic stimulus pacakge proposed by President Joe Biden. Local governments are struggling to also balance their budgets without federal support after sales tax revenue, a key source of offsetting property tax hikes, has nose dived in the last year.
New York is still receiving at least $9 billion from previous pandemic aid packages that will help reduce the impact of potential cuts. And Cuomo's budget proposal projects receiving at least $6 billion in additional aid over the next 24 months.