Growth Rate of NYS’ Budget Sets Stage for Future Instability Risk

New York State budget proposals by the Governor and Legislature could lead to structural deficits of $15 billion to nearly $20 billion by fiscal year 2027 without appropriate spending restraint according to the recent report by the Citizens Budget Commission (CBC). State Operating Funds (SOF) grew approximately $23.8 billion from fiscal year 2020 to fiscal year 2023, having seen accelerated growth during the pandemic. Under the Governor’s budget proposal, projected SOF growth is 3.6% in fiscal year 2024 and 4.3% annually thereafter — a growth rate of more than twice the rate of the preceding nine years on top of the “already extraordinarily high SOF spending growth in the last three years.” To stabilize the State’s fiscal health and avoid potential damaging service cuts or counterproductive tax increases, the CBC recommends that the “enacted budget should restrain spending, improve tax and economic competitiveness, and pursue budget and fiscal management reforms.”