For Immediate Release

December 17, 2009

Budgetary challenges to persist, New York State Comptroller Thomas DiNapoli tells ethnic media

New York State Comptroller Thomas DiNapoli addressing the ethnic and community media at the open house organized by New York Community Media Alliance. – Photo by Mohsin Zaheer

Press Briefing's video by Mohsin Zaheer

NEW YORK: New York State Comptroller Thomas DiNapoli has said that the state's budgetary challenges will persist during the next fiscal year starting in April next. Owing to the widening gap between shrinking resources and revenue and spending, he stated, the budgetary shortfall is expected to reach at least $8 billion by the end of current fiscal year.

Comptroller DiNapoli was speaking at a an open house organized by the New York Community Media Alliance for the city's ethnic and community media on Thursday, December 17.

"We are not out of the woods by any means and we wouldn't be for a period of time. The challenge for us in New York State today is that we need to do a better job of aligning our recurring spending with our recurring revenues. It means that we need to make smarter and tougher choices in spending."

Pointing to the Wall Street meltdown that drove the recession globally, and significantly here in New York City -- tax revenues from Wall Street are an important source of income and jobs for the city and the state, representing 20% of the state's revenues -- Comptroller DiNapoli said, "When that part of the economy is not profitable and is shedding jobs, New York City and New York state are going to be hit very hard by that." He indicated that since the recession financial services account for only 15% of the state's revenue, "so the restructuring of the economy is going to be with us probably for some time."

Although Wall Street was showing signs of recovery, Main Street is not, according to the Comptroller, "When people are losing jobs, the state no longer has a strong income tax base that it used to have." With less income, people spend less, thus affecting the collection of sales taxes, another important source of funds for the state. "Those revenues continue to be soft and continue to be below projection and that's why we have pressure on the state budget."

Comptroller DiNapoli explained that in the past Wall Street excess profits used to provide a necessary budgetary cushion that is no longer there. "[It] has become more apparent that New York has had a structural gap with its budget that has not been addressed. And that's why the state is facing a cash crunch in December," he said.

"We don't have enough money in the checkbook to pay all of the bills and obligations that are due in the month of December."

Both Governor David Paterson and the State Legislature adopted a deficit reduction plan, which partially addressed some of this difficulty, but "we are not out of it yet." DiNapoli revealed that in the month of December the state is expected to be left with a balance of $1.6 billion. "Usually we operate with more than $4 to $5 billion, so the cash available is within very very tight margins."

New York-based ethnic and community media actively participated in the open house. – Photo by Mohsin Zaheer

In an overview of the fiscal health of New York City, which he said was improving, by referring to the slowdown in job losses.  

After a lively Q&A session with the reporters, the Comptroller recognized the importance of ethnic and community media, which provides access to so many communities not reached by mainstream media, and expressed his desire to work more closely with this sector.