N.Y. RANKS 46TH FOR FISCAL HEALTH: REPORT
July 7, 2015 Submitted by dlaska on Wed, 2015-07-08 11:36
By Joseph Spector The Journal News
ALBANY – A national report Tuesday ranked New York as 46th in the nation for fiscal health, warning that the Empire State has "barely sufficient cash to cover short-term spending."
The report counters credit agencies that have given New York its highest ratings in more than 40 years, as well as proclamations from Gov. Andrew Cuomo that New York will have surpluses for years to come.
But the report from the Mercatus Center at George Mason University, based in Fairfax, Va., notes some concerns about New York’s finances that have also been raised by fiscal watchdog groups and Comptroller Thomas DiNapoli.
The report ranked New York low in budget solvency to cover its short-and long-term bills, as well as a debt load of $2,946 per capita — far outpacing the national average of $1,824 per person.
"Illinois, New Jersey, Massachusetts, Connecticut, and New York rank in the bottom five states, largely owing to low amounts of cash on hand and large debt obligations," the report from the group, which was founded by the conservative billionaire Koch brothers, said.
"High deficits and debt obligations in the forms of unfunded pensions and health care benefits continue to drive each state into fiscal peril."
There was no immediate comment from Cuomo’s office about the report.
New York passed a $142 billion budget on April 1 that limited state spending to 2 percent and predicts out-year surpluses to fund property-tax relief through a variety of rebates.
The state has also been aided by more than $5 billion from bank settlements that has been earmarked to fund a $1.5 billion upstate economic-development competition, $1.3 billion toward a new Tappan Zee Bridge and state Thruway repairs, as well as other one-time expenses.
New York’s finances have improved since the recession in 2008 and 2009, when the state faced a $17 billion deficit. When Cuomo took office in 2011, New York had a $10 billion deficit, but the state has had nearly no budget gaps in recent years.
New York has growing pension obligations for state and local workers, as well as costs to fund retirees’ health care. New York’s state and municipal governments, as well as its schools, have $250 billion in liabilities for retirees’ health coverage, but no fund to pay for it, a 2012 report from the fiscally conservative Empire Center, based in Albany, found.
In a report in March, DiNapoli warned about the state’s future budget projections and shifting lump-sum money among agencies to cover operating expenses.
"Most states are nearly back to normal since the Great Recession, although there are troubling signs that many states are still ignoring the risks on their books, mainly in underfunded pensions and health care benefits," the Mercatus Center report found.
"Even states that appear to be fiscally robust — perhaps owing to large amounts of cash on hand or revenue streams from natural resources — must take stock of their long-term fiscal health before making future public policy decisions," the report said.