By Joan Gralla
Sept 19 (Reuters) - New York state agencies were ordered to plan for “zero growth” in their budgets for the fiscal year that starts on April 1, 2013, the state budget director said in a letter made public earlier this week.
Budget Director Robert Megna told state agency commissioners that their 2013-2014 budget requests “must assume zero growth from your 2012-13 cash ceiling” in his directive.
“In other words, 2013-2014 budget requests cannot achieve zero growth through fiscal gimmicks or one-time actions,” Megna wrote.
Excluded were two areas that are subject to different caps on growth: school aid and Medicaid.
Megna’s directive, which also covers the 2014 budget , did not cite any possible revenue shortfall. He wrote only that Governor Andrew Cuomo is “committed to holding the line on state spending while maintaining his pledge to increase support for schools and healthcare in a sustainable manner.”
Many states have seen revenue increase since the recession, but the latest data show that growth has slowed as the economic recovery proceeds in fits and starts..
A new report on tax collections in New York state, which starts its fiscal years on April 1, was not particularly encouraging. Through August, tax receipts were $147 million less than projected, and down $204 million from a year ago, the state comptroller said on Wednesday.
“Almost halfway through the state’s fiscal year, the state’s budget is still on relatively solid ground, but weak revenue collections and slow economic growth signal a need for caution going forward,” Comptroller Thomas DiNapoli said.
The state took in a total of $24.7 billion through August. The main reason that collections underperformed was the decline of $188 million in personal income tax revenue on a year-over-year basis, DiNapoli said.
Cuomo, a Democrat, and the legislature agreed in late March on a new $132.6 billion budget, which totaled $135 million less than last year’s accord.
The state budget chief gave agencies until Oct. 16 to submit their plans. Megna’s directive is less harsh than one issued by New York City’s budget director, who ordered agencies last week to cut spending by $2 billion over two years due to the uncertain economy and the loss of revenue from a taxi medallion sale that was blocked by a court ruling in August.