New York State Comptroller Tom DiNapoli said Gov. Kathy Hochul’s $227 billion budget plan rightly includes increases to state reserves, but he warned the proposal exempts nearly $13 billion from competitive bidding and oversight and continues questionable debt practices.
DiNapoli, a fellow Democrat, issued his analysis of Hochul’s budget on Thursday, just before lawmakers release their own budget plans this week. Many of his concerns were established in his report on the state of the budget, including several economic and spending risks.
The plan has factored for a predicted recession, sparked by inflation and increased interest rates on a volatile market. The Division of Budget has reduced its projections of tax revenues by $1.2 billion this fiscal year and over $10 billion over the life of the plan.
The American Rescue Plan has also allocated $12.7 billion for the state to use for replacing lost tax revenue from the pandemic, though the longevity of that money and efficiency of how it has been used is not yet known.
DiNapoli said the state should bolster its reserves due to impending economic uncertainty and the end of federal COVID assistance. He urged the support of the financial plan's indication to put $13.5 billion towards "economic uncertainties" by the end of the fiscal year.
DiNapoli also warned Hochul’s plan circumvents the state’s debt cap, rendering it functionally meaningless. The budget plan proposes "backdoor borrowing" during the 2023-24 fiscal year rather than introducing tax and revenue anticipation notes.
Additionally, the Gateway Plan, an act to increase funding to infrastructure across the state, has been excluded from the official debt limit. This exclusion increases the fiscal amount of state sponsored budget projects excluded from the debt counter at $20 million. Reclassifying the act and exempting it from other debt projections would make the current picture of New York's debt a false representation of what it actually is.
He urged lawmakers to reject proposals that eliminate his office’s pre-audit authority for Managed Long Term Care Plan contracts, funds that offer AARP care for senior citizens. DiNapoli adds the budget as written would impair his ability to independently audit the state Health Insurance Program, including those long term care contracts.