Additional revenue recognized as part of annual consensus forecast and is made as economic recovery from global pandemic beats expectations
State still faces $17.5 billion, 2-year revenue loss, and risk remains as COVID-19 continues to drive economic uncertainty
Gov. Andrew Cuomo on Tuesday announced consensus has been reached with both houses of the New York State Legislature to recognize $2.5 billion in additional revenue over two years. The agreement was struck through the consensus revenue forecast process, a critical step in annual budget-making through which the executive and the Legislature agree on economic predictions and the revenue those predictions will provide. Through the agreement, about $1 billion in additional revenue will be recognized in the current fiscal year that ends March 31, and about $1.5 billion in next fiscal year.
However, the state is still contending with a $17.5 billion revenue loss over two years, and, according to the agreement, elevated risk remains as COVID-19 remains prevalent nationwide with the threat that an inability to contain it could lead to sectors of the economy closing once again.
"While the economy is growing beyond expectations and the delivery of vaccines is giving new hope, we must remain prudent as COVID-19 continues to spread," Cuomo said. "For New York's economy to fully recover, the federal government must deliver the $15 billion in aid after previous leadership failed to protect New York from the pandemic and end the cap on SALT deductibility. Thank you to the Legislature for its partnership in reaching this agreement and advancing the budget process."
Under the agreement, the executive and Legislature agree payroll employment in New York state will increase by 8.8% in fiscal year 2022, which starts April 1, following a dramatic 12.1% decline in the current year, fiscal year 2021. Personal income growth is expected to 6.5% for FY 2021 and 2.8% for FY 2022, and wage growth is projected to be 6.4% for FY 2022, following a decline of 2.6% for FY2021.
State Budget Director Robert F. Mujica said, "Revenues coming in higher than expectations is good news, but we're still contending with devastating revenue losses caused entirely by the pandemic that we need the federal government to offset so we can continue to fund baseline services over two years. These new revenues will be used to reduce the deficit in the out-years after the federal funding is no longer available."