The 2019-20 fiscal year brought the convergence of two dramatically different periods to New York State. The nation’s longest recorded economic expansion continued to generate overall job growth through most of the fiscal year before finally ending in February, as the COVID-19 pandemic forced severe limits on business activity and significantly impacted the State’s economy. The transition to a new fiscal year then brought the loss of more than 1.9 million jobs in New York, with more widespread economic uncertainty than we have seen in decades.
This Financial Condition Report can help New Yorkers better understand the challenges that lie ahead as the State responds to the economic, fiscal and human impacts of the pandemic. As always, we need to think not only about the immediate challenges, daunting as they are, but the longer-term outlook as well.
Federal aid provided nearly 37 percent of the State’s All Funds receipts in State Fiscal Year 2019-20. Federal funding supports health coverage for more than 7 million New Yorkers, and plays essential roles in programs including K-12 education, mass transit and social assistance. Now, however, we are in a time when federal aid is even more critically needed to ease the severe budgetary strains that threaten harmful cuts across the full range of vital public services provided by state and local governments. Whether Washington responds adequately, this year and through the entire course of the pandemic, will do much to determine both New York’s fiscal future and the ultimate impacts of COVID-19 on individuals, families and communities.
For SFY 2019-20 as a whole, State tax receipts showed healthy growth, with impacts from the economic slowdown appearing only near the end of the fiscal year. Looking forward, the economic damage brought on by the coronavirus is expected to continue over multiple years, and the same is true of the impact on tax receipts. If federal relief and stimulus aid does not adequately mitigate those revenue losses, policymakers’ choices regarding taxes, spending and debt must reflect a careful balancing of factors. These include the nature of our tax base, including heavy reliance on higher-income taxpayers; the need for robust public services, including adequate safety net programs to boost our overall economy and to help New Yorkers in need; and the long-term fiscal sustainability of our State and local governments.
This report provides information and analysis across the full spectrum of New York State government, starting with key fiscal numbers on revenues, spending, capital investments and debt. It highlights major issues in programmatic areas ranging from public health to public safety, energy and the environment, K-12 and higher education, transportation and more.
The coronavirus pandemic has brought an era of extraordinary uncertainty to New York State. By providing essential facts and perspective regarding the State’s fiscal and economic condition, this report can help policy makers and the public consider the best ways to address such uncertainty and create a stronger future for all New Yorkers.
Thomas P. DiNapoli