New York State is facing a number of fiscal challenges resulting in part from economic factors beyond the State’s control. National economic growth is slowing and the risk of recession is increasing.

The Enacted Budget for State Fiscal Year (SFY) 2008-09 was passed by the Legislature in its entirety by April 9, 2008, despite tremendous economic uncertainty, declining revenue projections and the transition to a new Executive at a critical time in the budget process.

Our nation is facing very challenging times. The current economic climate, characterized by escalating fuel and food costs, ongoing volatility in the financial markets and continued weakness in the housing market, is straining budgets at every level from federal, state and local governments to individuals.

This report is the first of a series of quarterly reports that will highlight key aspects of the State Financial Plan, including variances and risks, as actual revenue and spending information is made available through the Office of the State Comptroller Monthly Cash Reports.

Over the past year, financial firms have written off hundreds of billions of dollars in bad debt, which has resulted in a loss of confidence and a destabilization of the financial markets.

This report is part of a series of quarterly reports that highlight key aspects of the State Financial Plan, including variances and risks, based on actual revenue and spending information from the Office of the State Comptroller Monthly Cash Reports.

This Report on Estimated Receipts and Disbursements for State Fiscal Year (SFY) 2008-09 through SFY 2010-11, issued pursuant to Chapter 1 of the Laws of 2007, is intended to facilitate preliminary discussion on the State’s economic condition and the upcoming budget for SFY 2009-10.

In response to the ongoing economic crisis in the State and nation, the State Fiscal Year (SFY) 2009-10 Executive Budget recommends $9.5 billion in spending reductions, $3.1 billion in new and higher taxes and fees, and $1.1 billion in nonrecurring resources to close an anticipated $13.7 billion SFY 2009-10 General Fund deficit, including shortfalls expected in the Health Care Reform Act (HCRA) funds.

The December 2008 Cash Report indicates that tax collections, while in line with current Financial Plan projections released with the Governor’s proposed budget on December 16, again illustrate a slowing economy.

The Enacted Budget for State Fiscal Year (SFY) 2009-10 clearly demonstrates the need for comprehensive fiscal reform.