Declining income tax payments, coupled with “historic” Medicaid spending and money for illegal immigrants, has put New York in a fiscal bind, according to a mid-year report from the state’s Division of the Budget. The assessment comes as the state sets spending records with budgets increasing by over $20 billion since Democrat Kathy Hochul has been governor.
After the state received a massive influx of federal COVID relief monies, New York enjoyed a $8.7 billion surplus. “According to today’s mid-year report, we now face a $4.3 billion deficit next year. Something has to change,” said a statement from the Republicans in the state assembly. “New York Democrats’ pattern of runaway spending cannot continue.”
According to the Division of Budget, tax receipts have come up $800 million short against expectations from the last quarter. The state is facing budget gaps of $9.1 billion in 2025 and $13.4 billion the following year. Tax receipts are forecast to drop $9.6 billion (8.5 percent) next year as residents grapple with inflation, high fuel prices, and economy-busting policies out of Albany and Washington.
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One unanticipated expenditure is nearly $350 million to construct a tent city at Floyd Bennett Field in Brooklyn to house some of the 125,000 immigrants that have flooded into the city. According to Budget Division Director Blake G. Washington, instead of footing the bill for “indefinite stays in hotel rooms,” the state must consider limiting its help to legal aid services and case management workers to connect the asylum-seekers with jobs. Hochul reported that the migrant crisis could reach $4.5 billion, a cost she admits would be “unsustainable.” New York Mayor Eric Adams said the migrant crisis will “destroy New York City.”
“We are at capacity,” Hochul said. “I just want to make sure that we're managing expectations. Because I also have to manage an entire budget that funds education, health care, child care, and other services that New Yorkers want to make sure are not cut.”
“While DOB’s updated U.S. and New York economic outlooks have improved with a milder than originally forecasted economic downturn, significant downside risks remain related to
forecast risk for January estimated payments and bonus-related tax liability, and the potential for a weakening economy with continued price inflation, soaring oil prices, global unrest, continued wars, and military action,” the number crunchers stated.
“The numbers show what we have been saying for the last few years–the Democrats are spending us into oblivion, and it’s getting worse,” said Assemblyman Joseph DeStefano, who points out that state spending has skyrocketed $60 billion in the last five years. “They burned through the COVID money and are now looking at huge deficits. We’ll keep up the pressure to bring spending down and, hopefully, convince fewer people to flee our state.”