New York State is bringing in more tax money than expected this year, according to a new report from State Comptroller Tom DiNapoli. While this is a sign that the state’s finances are stable in the short term, fiscal danger lies ahead as big spending pressures loom and the bloated state budget ballooned to $254 billion.
Through the first nine months of the current budget year, the state collected $85.8 billion in taxes, about $2.3 billion more than state budget officials predicted. Compared to last year, tax collections are up nearly $6 billion, helped by higher wages, strong financial markets, and solid consumer spending.
The biggest boost came from personal income taxes, which are up more than $4 billion from last year. That means many New Yorkers are earning more, investing more, or cashing in stock market gains. Sales tax revenue is also up, showing people are still spending at stores, restaurants, and online. Business taxes climbed as well, adding hundreds of millions more than expected.
But while money coming in is strong, money going out is growing even faster.
State spending hit $183.4 billion through December, up more than 6 percent from last year. Much of that increase is tied to Medicaid and other health care costs, which continue to rise sharply. Overall government spending in New York State is already $1.2 billion higher than planned.
The state’s main checking account, known as the General Fund, ended December with $53.9 billion on hand, more than budget officials expected, but still lower than last year’s balance.
DiNapoli warned that the State Legislature and Governor Hochul need to keep saving money now, to protect schools, health care, and public services if the economy turns or federal aid is reduced.
In short: New York has extra cash today, but rising costs and federal uncertainty mean tough choices could be ahead.