At the end of his address to 170 members and guests at the Dutchess County Regional Chamber of Commerce breakfast Jan. 19, state Comptroller Thomas DiNapoli asked for some feedback on repealing the MTA transit tax. Ever unpopular regionally, the anti-tax applause in the Poughkeepsie Grand Hotel ballroom was instantaneous.
“There”™s some talk of altering it,” DiNapoli said of the so-called “commuter tax.” “But if you do that, what do you substitute? That”™s the question. It”™s the give and take of a democratic system.”
Attendees included nonprofit executives and, mostly, business persons. The Chazen Cos. ”“ engineers, surveyors, landscape architects and environmental consultants ”“ was sponsor, with chamber President Charles North moderating. It was the chamber”™s 604th get-together and included a Q&A.
Fresh from re-election in November, DiNapoli painted a picture of state finances that was grim, but which had the potential to be far grimmer.
The state”™s annual revenue shortfall that was expected to be $315 million is instead shaping up to be a $1 billion-plus chasm. “No matter how you look at it, there is a gap,” DiNapoli said. He is determined not to ladle the current red ink into 2012, an accounting move that he said possesses the option for an $11 billion deficit in the future. Taking past deficits into account, DiNapoli said the state has a projected cumulative budget gap of $25 billion.
Budget woes in the past had dissipated when times were flush. But DiNapoli said this downturn has been different. Before the recession, Wall Street contributed 20 percent of all state revenue. That number is now 15 percent. “It”™s still important, but in terms of reliance for revenue to the state, it is a changed picture.”
DiNapoli said some programs are designed to raid single accounts their first year, only to scramble for resources in following years. “There can be no more spending commitments that are not sustainable.” The current budget, he said, possesses $16 billion in one-time revenues, including $6 billion in federal stimulus money.
“Personal income tax receipts are in line with projections,” DiNapoli said, calling the numbers “on the positive side.” Sales tax receipts, too, are up: 8.4 percent in 2010 vs. 2009 in Dutchess County, although, DiNapoli said in reference to the recession, “We have to keep that in the context of some really bad years.”
DiNapoli said the state”™s General Fund spending is expected to increase 28 percent by 2013, but that revenue was only expected to rise 7 percent. Education and government-funded health care are the big hits: 46 percent of the budget as compared with 37 percent 20 years ago.
He said the new Albany mindset is to look at programs while looking at revenue projections. Cuts were likely coming. “This has many implications,” he said. “As citizens, we have to change our expectations. We have to make adjustments.
“We must change the budget process. There can be no more one-shot budget enhancements. And we must limit borrowing through public authorities that too often operate in the shadows. We need more transparency.”
After urging a revitalization of the state”™s economic development initiatives to attract, maintain and promote business, DiNapoli declined an invitation from Ossining-based Bridges to Community board member Frank Pepe to travel to Nicaragua to build houses with the nonprofit. DiNapoli said, “Then the Daily News would say I”™m on a junket.”
