On Monday, the New York State Division of Budget (DOB) issued the Mid-Year Update to the New York State Financial Plan. The plan highlighted that the projected budget gap for FY 2025 has been reduced from $9.1 billion to $4.3 billion, as well as the out-year gaps have been reduced by approximately $5 billion each year.
However, a weakening economy had led to a reduction in tax receipts. Personal income tax (PIT) estimated payments to date continue to fall below expectations. With this Mid-Year Update, the revised All Funds tax receipts forecast is now projected to decline by $9.6 billion (8.5 percent) in FY 2024 compared to FY 2023 collections. This is a downward adjustment of approximately $700 million from the July Update to the Financial Plan.
The updated plan also reflects on the pressing issue of the ongoing request for financial assistance from New York City to help manage the continued influx of asylum seekers. According to the plan, the state has already committed over $1.5 billion in resources for case management, funding for infectious disease screenings and immunizations, and for rental coverage. With no federal financial assistance in sight, DOB warns that the state can only shoulder this financial assistance for a limited duration, otherwise different areas of the State Budget can result at risk such as aid to public schools, support for health delivery infrastructure, and more.