ALBANY- With looming budget challenges for the upcoming fiscal year, state agencies have been directed that the upcoming spending plan will adhere to strict spending limits with budget requests not to exceed this year’s $229 billion budget.
Over the past several years, the state has significantly increased year-over-year spending, which has largely been supported by federal stimulus funds. Federal funds are not expected to be delivered to the state this year, leaving lawmakers two options: raising new revenue, or cutting expenses.
According to the state Division of Budget, New York’s revenue shortfall is projected to be $36 billion over the next three years. Governor Hochul, for now, has rejected the idea of new taxes prompting the need to carefully control expenses. The projected shortfall is due to declining tax revenues and the loss of one-time federal funding, coupled with rising expenses.
The state budget process begins in January when the Governor will then present her executive budget proposal to the state legislature. The legislature will then hold hearings and negotiate with the Governor on a final spending plan, which is due by April 1, 2024.