One-shot revenues are temporary financial resources, such as legal settlements, asset sales, or federal aid, that New York State and the Metropolitan Transportation Authority use to balance budgets in the short term. This page covers CBC’s work on structural budget gaps, the use of non-recurring resources for permanent spending, fiscal transparency, rainy day fund reserves, and the risks of relying on temporary funding to support ongoing operations.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
State leaders should re-balance the State’s budget by making tough, smart choices.
The State should preserve core programs that have greatest impact while shrinking others.
The State should protect recession-mitigating reserves to prepare for future economic downturns.
The State should hold the line on taxes to ensure New York’s competitiveness.
Albany should continue to advocate for the federal support New York deserves.
Key Data
As of December 2025, the MTA's multi-year plan relies on $2.1 billion in one-time resources, including FEMA reimbursements and casino license fees, which will not be available in future years.
In June 2025, the CBC noted that once reliance on non-recurring resources is removed, the State's long-run imbalance between receipts and disbursements now exceeds $20 billion.
As of March 2024, New York State's habit of using short-term revenues to seed permanent spending increases has caused its structural budget gap to grow to $16 billion to $20 billion.
In January 2024, the State's spending base was supported by at least $5.5 billion in temporary tax increases and prepayments, revealing a structural gap of approximately $15 billion.
The March 2023 Executive Budget included $14.8 billion in lump sum appropriations, which are discretionary funds that lack specific sources of funding or rigorous criteria.
The Metropolitan Transportation Authority's financial plan relies on $2.1 billion in one-time resources to mask a structural budget gap that reaches $1.1 billion by 2029. To ensure long-term fiscal stability and avoid future service reductions, the agency must implement recurring efficiencies, reduce fare evasion, and control paratransit costs rather than relying on temporary funding sources.
Recommendations related to One-Shot Revenues
Implement additional operating efficiencies in collaboration with labor by modifying work rules, increasing employee availability, and sharing the benefits of additional operational flexibility and higher productivity to cut costs while supporting competitive wages.
Continue to reduce fare evasion, which is on track to cost more than $900 million this year, by assessing the cost-effectiveness of enforcement efforts, refining the multifaceted approach to reducing fare evasion, accelerating the rollout of new faregates and a proof-of-payment system, and working with the District Attorneys to actively pursue and try serial fare evasion cases.
Reduce paratransit per-trip expenses by using the paratransit fleet and broker services strategically to ensure users are provided with the lowest-cost transportation option that meets their needs and considering greater use of shared paratransit rides.
Continue biennial fare and toll increases and consider tying them to year-over-year expense growth instead of a flat 4 percent.
Collaborate with the City to improve uptake, assess the cost-effectiveness, and consider expanding Fair Fares NYC.
Key Data
$2.1 billion
— Total amount of one-time resources the MTA is relying on over the next four years.
$1.1 billion
— The MTA's underlying structural budget gap in 2029.
$682 million
— Expenses in 2029 that the plan relies on prior year surpluses to cover.
$600 million
— Amount the MTA expects to receive from the Federal Emergency Management Agency (FEMA) for COVID-related expenses.
$500 million
— Amount the MTA plans to spend from each of the three casino licenses from 2026 through 2028.
$900 million
— Estimated cost of fare evasion in 2025.
The FY2026 New York State budget relies heavily on non-recurring resources, masking a long-run structural imbalance between receipts and disbursements that exceeds $20 billion. To address this, state leaders must make difficult choices to re-balance the budget, including preserving core programs, shrinking others, and protecting reserves.
Recommendations related to One-Shot Revenues
State leaders should re-balance the State’s budget by making tough, smart choices.
The State should preserve core programs that have greatest impact while shrinking others.
The State should protect recession-mitigating reserves to prepare for future economic downturns.
The State should hold the line on taxes to ensure New York’s competitiveness.
Albany should continue to advocate for the federal support New York deserves.
Key Data
$14 billion
— Future annual budget gaps resulting from ballooning spending and lower projected receipts.
$20 billion
— Long-run imbalance between receipts and disbursements once reliance on non-recurring resources is removed.
12%
— Increase in adjusted State Operating Funds spending, which is approximately four times the rate of inflation.
$49 billion
— Amount the State spent before providing transparency to New Yorkers on how their money is being used.
New York State's reliance on temporary revenues to fund permanent spending increases has contributed to a structural budget gap ranging from $16 billion to $20 billion. To avoid destabilizing the budget, the State should restrict the use of time-limited federal funds to one-time programs rather than recurring expenses.
Recommendations related to One-Shot Revenues
The State should not budget money it does not have, as there is a risk that the State does not get the money.
Federal funds would be time-limited and should be only used to finance one-time programs.
The State should only pursue this path after it has identified and publicized the planned one-time programs.
The State needs to break its bad habit of ratcheting up spending on the back of temporary receipts.
Key Data
$16 billion to $20 billion
— The current structural budget gap in New York State.
$4 billion
— The amount of federal money the proposed tax on Medicaid and managed care plans aims to leverage.
New York State's fiscal stability is threatened by a structural gap of approximately $15 billion, which is partially masked by $5.5 billion in temporary tax increases and surplus pre-payments. To ensure long-term competitiveness and fiscal health, the state must align future spending with its ongoing revenue base and allow temporary tax increases to expire as scheduled.
Recommendations related to One-Shot Revenues
Ensuring that temporary increases sunset on time, is critically important to New York’s competitiveness.
The State must get on a path to align future spending with its ongoing receipts base.
State lawmakers should make basic improvements to the budget process to increase transparency and accountability, including omitting fiscal maneuvers that undercut accountability.
Key Data
$5.5 billion
— Amount of the State’s spending base supported by temporary tax increases and pre-payments from prior year surpluses.
$15 billion
— The State’s structural budget gap.
$9.9 billion
— The projected fiscal year 2028 budget gap.
$19 billion
— The amount of record State reserves maintained in the proposal.
New York State should reform its rainy day fund by mandating automatic deposits during economic growth and setting a target of 22 percent of operating spending to ensure fiscal stability. Additionally, the state should direct one-time extraordinary revenues, such as legal settlements, into these reserves rather than using them to fund recurring operations.
Recommendations related to One-Shot Revenues
Combine all principal reserves into the Rainy Day Reserve (RDR) lockbox immediately.
Deposit up to an additional $2.4 billion to the RDR this year.
Set a target for the RDR of 22 percent of SOF spending.
Increase the maximum allowed RDR balance to 30 percent of SOF spending.
Mandate automatic RDR deposits when the economy is growing.
The State should consider whether to mandate the deposit of a portion of one-time extraordinary revenues, such as legal settlements.
Key Data
$2.4 billion
— The amount the State should deposit to the Rainy Day Reserve this year.
22 percent
— The recommended target for the Rainy Day Reserve as a percentage of State Operating Funds spending.
$27.9 billion
— The recommended Rainy Day Reserve savings level for fiscal year 2024.
$19.5 billion
— The amount currently held in New York State's Principal Reserves.
30 percent
— The recommended maximum allowed balance for the Rainy Day Reserve as a percentage of State Operating Funds spending.
$23 billion
— The hypothetical balance the Rainy Day Fund would have exceeded in 2020 if automatic deposits and one-time extraordinary receipts had been saved.
New York State's Fiscal Year 2024 Executive Budget includes $14.8 billion in discretionary lump sum appropriations that lack transparency and public scrutiny, creating significant risks of waste and corruption. These funds are often allocated based on political considerations rather than public benefit, and should be replaced by transparent, evidence-based budgeting practices.
Recommendations related to One-Shot Revenues
The State should not enact any new lump sum appropriations that authorize spending on a broad range of projects or purposes to be determined and allocated at a later date.
The State should omit the $6 billion Special Public Health Emergency Appropriation from the budget.
The State should reduce the Special Emergency Appropriation to $1 billion, and ensure it is subject to OSC oversight and competitive procurement rules.
The State should fully and completely disclose distributions from all lump sum pots currently being spent.
The State should pass a law codifying the Governor’s discretionary lump sum database, including improved requirements for disclosure.
The State should provide full data for lump sum spending dating back to at least 2020.
Key Data
$14.8 billion
— Total proposed State FY 2024 discretionary lump sum spending authority.
$8 billion
— Amount of lump sums for the COVID emergency included in the total $14.8 billion.
$6 billion
— Amount of the Special Public Health Emergency Appropriation.
$1 billion
— Amount of the Special Emergency Appropriation.
$6.8 billion
— Amount of non-emergency lump sums in the FY 2024 Executive Budget.
$3.1 billion
— Amount of lump sums the Executive alone has discretion to allocate.
New York State's budget proposals rely heavily on nonrecurring resources and temporary tax increases, creating a structural fiscal imbalance that could lead to deficits of nearly $20 billion by fiscal year 2027. To ensure long-term fiscal stability, the state must implement spending restraint and allow temporary revenue measures to expire as scheduled rather than relying on these one-shot fixes.
Recommendations related to One-Shot Revenues
Restrain SOF spending growth to 2 percent annually to bring spending trends in line with receipts and close forecast gaps.
Allow temporary tax increases to sunset as scheduled or earlier to improve New York’s competitiveness and reduce the costs of living and doing business.
Maintain or expand the Governor’s Rainy Day reserves plan by dedicating more funding to the lockbox and automating future deposits.
Publish basic financial plan tables with the enacted budget so New Yorkers can understand the fiscal impacts of their leaders' choices.
Reform the State’s budgeting and fiscal management to improve services, stability, and accountability through standardized accounting and better debt management.
Key Data
$14.9 billion
— Total nonrecurring resources relied upon in the Fiscal Year 2024 Executive Budget.
$10.4 billion
— Amount of extraordinary federal aids that will be exhausted within two years.
$20 billion
— Projected structural deficit by fiscal year 2027 if the Legislature’s spending plans are enacted.
$7.2 billion
— Projected budget gap in fiscal year 2027 under the Governor’s proposal.
$2.4 billion
— Amount of new, recurring spending added in the Executive Budget.
$3.9 billion
— Additional annual spending proposed by the Legislature on top of the Executive proposal.
New York State should avoid using one-time receipts to cover recurring expenses, as this creates fiscal cliffs when those temporary funds are exhausted. Instead, the state should prioritize long-term fiscal stability by restraining spending growth and bolstering reserves.
Recommendations related to One-Shot Revenues
The budget should not fund recurring costs with these one-time receipts.
Key Data
$2 Billion
— The amount of available revenues identified in the mid-year budget update that should be added to planned deposits.
New York State faces a $12 billion structural budget problem as it relies on non-recurring resources and temporary tax increases that are set to expire. To ensure long-term fiscal stability, the state must restrain spending growth and move away from using these one-time revenues to balance the budget.
Recommendations related to One-Shot Revenues
The State should reduce State Operating Funds (SOF) spending growth to 2 percent annually to eliminate the 2027 budget gap and accommodate the loss of nonrecurring resources.
The State should exercise spending restraint to accommodate the expiration of nonrecurring resources beyond fiscal year 2027.
The State should implement structural reforms, such as establishing an independent fiscal analyst’s office and transitioning to budgeting on a modified accrual basis, to improve fiscal stability.
Key Data
$6 billion
— Amount of the fiscal year 2027 budget balanced by resources that will not be available the following year.
$3.8 billion
— Amount of the fiscal year 2027 budget that relies on the last year of the personal income tax increase.
$2.9 billion
— Amount of nonrecurring funds from prior years that the fiscal year 2027 budget relies upon.
$13 billion
— Amount of pandemic-related federal aid received for schools that will be exhausted by the end of fiscal year 2025.
$10 billion
— Minimum amount of pandemic-related federal aid received for Medicaid that will be exhausted by the end of fiscal year 2025.
$13 billion
— Amount of pandemic-related federal aid received for general fiscal relief that will be exhausted by the end of fiscal year 2025.
New York faces future budget gaps approaching $6 billion, which will widen to $12.7 billion once one-time money and temporary tax surcharges expire. To ensure long-term fiscal stability, the state must restrain spending growth, maintain reserves, and improve the targeting of education and health care investments.
Recommendations related to One-Shot Revenues
The state should stay the course on reserves to ensure a lifeline is available during the next recession.
The state should restrain spending growth, as limiting growth to 2% annually through 2028 would be enough to close the projected $12 billion gap.
New York should better target education aid to high-need districts and reevaluate assistance to wealthy districts that already self-fund a sound basic education.
The state should maximize job creation and environmental benefits by basing economic development and climate investments on data, evaluation, and tradeoffs.
The state should implement comprehensive performance management to deliver high-quality, efficient services and focus funds where the impact is greatest.
Key Data
$6 billion
— The amount by which spending will exceed receipts by fiscal year 2027.
$12.7 billion
— The projected budget gap in the year following fiscal year 2027, which will not benefit from one-time money to prepay expenses and the expiring personal income tax surcharge.
$10 billion
— The amount of reserves the state currently has, which can serve as a lifeline during the next recession.
$19 billion
— The amount the state plans to increase its reserves to over the next few years.
New York State has relied on non-recurring federal aid to support recurring programs, creating a $3.5 billion fiscal cliff by fiscal year 2025 once these funds are exhausted. To ensure long-term fiscal stability, the state must improve financial transparency, adopt Generally Accepted Accounting Principles (GAAP), and avoid using fiscal maneuvers that obscure true spending growth.
Recommendations related to One-Shot Revenues
The State should shift to budgeting and reporting using Generally Accepted Accounting Principles (GAAP) to improve transparency and accountability.
The State should identify actions to reduce the existing out-year gaps and avoid the fiscal cliff in the forthcoming budget.
The State should bolster reserves needed to mitigate the inevitable next downturn.
The State should restrain new aid growth for wealthy districts as a way to meaningfully control spending and reduce future budget gaps.
The State should forego fiscal maneuvers that obscure the true size of the budget and distort spending increases.
Key Data
$3.5 billion
— The projected fiscal cliff, or gap between available funding and planned spending, in fiscal year 2025.
$12.7 billion
— The amount of American Rescue Plan (ARP) federal fiscal relief the State received in May 2021 to be disbursed over four years.
15.5 percent
— The adjusted increase in State Operating Funds (SOF) spending in fiscal year 2022.
5.7 percent
— The decline in State Operating Funds (SOF) spending in fiscal year 2021 after adjusting for fiscal maneuvers.
$130.7 billion
— The projected State Operating Funds (SOF) spending in fiscal year 2025.
New York State has relied on accounting maneuvers, such as shifting Medicaid payments and delaying debt service, to artificially meet spending growth benchmarks before the pandemic. With the influx of federal aid providing a temporary surplus, the state must prioritize restructuring its long-term spending to ensure sustainability once these non-recurring funds are depleted.
Recommendations related to One-Shot Revenues
The State should use the next two years to restructure spending to be more sustainable to address the gaps that will exist and grow when the federal funds are depleted.
Key Data
$1.7 billion
— Medicaid payments deferred into fiscal year 2020.
$8 billion
— Unspecified recurring spending reductions included in the fiscal year 2021 enacted budget.
$9.6 billion
— Projected surplus over fiscal years 2021 through 2023 if the Executive Budget is enacted.
$1.3 billion
— Estimated spending increase in the current year if Executive Budget savings proposals are restored.
$3.2 billion
— Estimated spending increase in fiscal year 2022 if Executive Budget savings proposals are restored.
$2.8 billion
— Average annual spending increase over the following three years if Executive Budget savings proposals are restored.
New York State faces significant multiyear fiscal challenges, yet the Executive Budget is expected to rely on one-time revenues like fund sweeps, asset sales, and reserve usage to balance the books. Relying on these temporary measures, alongside short-term debt conversion and expense shifting, risks creating long-term financial instability and constraining future service funding.
Recommendations related to One-Shot Revenues
The State should avoid balancing this year’s budget using cost shifts or revenue intercepts that harm local governments.
Borrowing for operations should be a last resort, used only after the State exhausts less harmful strategies, and should be accompanied by a multi-year fiscal stability plan and increased transparency and oversight.
The State should not convert short-term debt to long-term debt to fund current operations.
Any revenue proposal should be realistic about the timing of revenue and avoid dedicating revenue to uses beyond programs related to the consequences of use.
Key Data
$7 billion
— Total reserves available to the State, including rainy day funds and the Economic Uncertainties Fund.
$3.5 billion
— Remaining short-term debt that the State reportedly plans to repay within the fiscal year.
$1.7 billion
— Medicaid costs shifted from March 2019 into April 2019, moving the expense from fiscal year 2019 to fiscal year 2020.
$2.5 billion
— Amount currently held in New York's rainy day funds.
$1.5 billion
— Amount currently held in the Economic Uncertainties Fund.
$3.3 billion
— Other reserves available to the State.
New York State has utilized various accounting maneuvers, including shifting expenses off-budget and accelerating debt payments, to mask actual State Operating Funds spending growth of 4.9 percent in fiscal year 2020. These reclassifications and shifts undermine fiscal transparency by making it appear that spending growth remains within the 2 percent benchmark when it has actually exceeded it.
Key Data
$4.7 billion
— Total amount shifted out of fiscal year 2020 State Operating Funds spending through various accounting maneuvers.
$1.4 billion
— Reduction in reported State Operating Funds spending in fiscal year 2019 due to shifting the Metropolitan Commuter Transportation Mobility Tax off-budget.
$1.5 billion
— Amount of fiscal year 2020 debt service payments prepaid in fiscal year 2019.
$1.24 billion
— Amount by which State Operating Funds spending appears lower due to the reclassification of School Tax Relief (STAR) benefits.
4.9 percent
— Actual projected growth of State Operating Funds spending in fiscal year 2020 after adjusting for accounting maneuvers.
$292 million
— Amount of taxes and fees collected on behalf of the Metropolitan Transportation Authority shifted off-budget in fiscal year 2020.
New York State faces a $2.3 billion revenue shortfall driven by federal tax changes and economic volatility, necessitating immediate fiscal restraint. To address this gap, the state should avoid relying on one-shot budget fixes and instead prioritize spending limits, the repeal of specific tax credits, and the bolstering of rainy day reserves.
Recommendations related to One-Shot Revenues
The State should avoid one-shot gap-closing actions to address the revenue shortfall.
The State should resist short-term solutions, such as deferring retirement systems payments or business tax credits, which only exacerbate future deficits.
The State should repeal the property tax relief credit set to expire after calendar year 2019 to reduce the fiscal year 2020 deficit.
The State should eliminate the appropriations connected to unused settlement funds and dedicate them to rainy day funds.
The State should hold spending growth to 2 percent to be in the best position to weather potential economic uncertainty.
Key Data
$2.3 billion
— The amount of the shortfall in January personal income tax collections reported by the Governor.
$1.45 billion
— The amount the State would save in fiscal year 2020 by holding spending growth to 2 percent.
$500 million
— The amount that could be saved by increasing education aid only to districts that need additional State resources.
$956 million
— The Governor’s proposed increase in education aid.
$1 billion
— The amount by which the fiscal year 2020 deficit would be reduced if the property tax relief credit were repealed.
$2.9 billion
— The total amount of allocated but unused settlement funds that could be used for budget relief.
New York State's budget relies on one-time revenues from financial settlements and asset conversions to fund recurring operations, which creates fiscal instability. To ensure long-term financial health, the state should avoid using these temporary funds for ongoing expenses and instead prioritize building reserves.
Recommendations related to One-Shot Revenues
The State should not use one-time revenues to fund recurring spending to avoid exacerbating future deficits.
The State should use one-time financial settlements and asset conversions to build reserves rather than funding operations.
Key Data
$383 million
— One-time revenue from financial settlements used in the current budget to fund operations.
$500 million
— One-time revenue from the Fidelis conversion used in the current budget to fund operations.
$800 million
— One-time revenue from settlements received by the State after the fiscal year 2019 budget was adopted.
New York should exercise caution regarding potential marijuana tax revenues, as early estimates are speculative and implementation delays are common in other states. Rather than relying on optimistic projections to balance the budget, the state should ensure any future revenue is transparently managed and used for recurring operating expenses only after the market matures.
Recommendations related to One-Shot Revenues
Recreational marijuana revenues should not be included in the State financial plan until the very complicated steps of crafting the statute and regulations have been completed; budgeting should not rely upon best guesses or optimistic assumptions.
Any future revenue should be received and spent on-budget, not through off-budget trusts or other fiscal gimmickry.
Marijuana revenue will be recurring and reliable when the market is mature and should be used for recurring operating budget purposes.
Key Data
$430 million
— Collected in Washington State in fiscal year 2017 from marijuana sales and excise taxes.
$82 million
— Tax revenue received by California in the first six months of legal recreational marijuana sales.
$185 million
— Projected tax revenue for California in the first six months of legal recreational marijuana sales.
$700 million
— Potential annual tax revenue from marijuana legalization in New York State according to a Department of Health study.
$33 million
— Estimated reduction in New York State's alcohol tax revenues due to legalized marijuana.
New York State has received over $11 Billion in litigation settlements since fiscal year 2014-2015, yet none of these funds have been used to bolster the state's rainy day reserves, which currently sit at only 2.7% of general fund tax revenues. Instead, these one-time revenues have been heavily allocated to economic development, transportation, and operating budget gaps, with approximately $5 Billion in settlement funds remaining unused as of the end of fiscal year 2018.
Recommendations related to One-Shot Revenues
The State should reappropriate unused settlement funds to bolster the State’s rainy day funds to the recommended level of 10% of general fund tax revenues.
Where practical, unused settlement funds should be reappropriated to the State’s reserves.
At a minimum, the recently realized $205 Million and $76 Million in unallocated funds should be deposited directly into the State’s rainy day fund.
Key Data
$11 Billion
— Total litigation settlements received by New York State since fiscal year 2014-2015
$5 Billion
— Unused settlement funds at the end of fiscal year 2018
$652 Million
— Settlement funds used to close the fiscal year 2019 operating budget gap
2.7%
— Current rainy day reserves as a percentage of general fund tax revenues
10%
— Recommended level of rainy day funds as a percentage of general fund tax revenues
$205 Million
— Recently realized settlement with Deutsche Bank
The New York State Fiscal Year 2019 Budget relies on short-term measures, such as settlement funds and health insurance revenue, to close budget gaps instead of implementing structural spending reforms. To avoid forcing the City of New York to provide $418 million for the Subway Action Plan as a short-term revenue fix, the state should pursue long-term solutions like a comprehensive congestion pricing plan.
Recommendations related to One-Shot Revenues
The State should close the budget gap using restraint in and reform of spending commitments instead of short-term measures.
The State should adopt a fuller congestion pricing plan to reduce traffic and provide a significant long-term revenue source.
Key Data
$418 Million
— Amount the City of New York is forced to provide for the Subway Action Plan to increase short-term revenues.
New York's reliance on speculative, nonrecurring revenue from health insurer conversions to fund ongoing Medicaid costs is fiscally imprudent and creates future budget gaps. Instead of using these finite, episodic funds for recurring expenses, the state should prioritize using them to bolster reserves, repay debt, or support one-time capital investments.
Recommendations related to One-Shot Revenues
The State budget and financial plan should not depend on $2 billion from this precarious source.
Any proceeds earned by the State should not be used for multiyear budget balancing.
These revenues are episodic and finite and should be used to bolster reserves or fund one-time costs after proceeds are received by the State.
Nonrecurring resources are best used to repay debt, support capital investments, increase reserves, or make possible other desirable one-time expenses.
Key Data
$3 billion
— The amount proposed by the Governor over four years from health insurer conversions.
$4.6 billion
— The total generated for the State from the Empire conversion from fiscal year 2006 to fiscal year 2010.
$3.75 billion
— The publicized price for the acquisition of nonprofit Fidelis by for-profit Centene.
$95 million
— The amount the State received in conversion proceeds from fiscal year 2009 to fiscal year 2012, despite a projection of $2.4 billion.
$1.2 billion
— The net assets of Fidelis, the nonprofit managed care plan serving the New York Medicaid market.
$250 million
— The net income of Fidelis, the nonprofit managed care plan serving the New York Medicaid market.
The City of New York projects $1.2 billion in revenue from future taxi medallion sales, but declining market values due to ride-sharing competition make these budget assumptions unrealistic. To ensure fiscal stability, the City should remove these projected revenues from its financial plan until the taxi industry stabilizes.
Recommendations related to One-Shot Revenues
The City should adjust its budget assumptions to reflect the current market, with the most prudent action being removing this revenue from its financial plan until the industry stabilizes.
The City should, at a minimum, adjust its assumptions for how much can be earned from future sales given current industry trends.
The City should remove the revenue from the financial plan until a more stable and realistic basis can be identified for the value of any future auctions.
Key Data
$1.2 billion
— Expected revenue from the sale of new taxi medallions from fiscal years 2019 to 2023.
$1 billion
— Projected revenue in fiscal year 2013 from the November 2011 financial plan.
$1.5 billion
— Increased revenue projection for medallion sales spread over three years in the fiscal year 2013 budget.
$359 million
— Revenue generated from the auction of 350 medallions during fiscal year 2014.
$864,000
— Average winning bid for an individual medallion in 2014.
$1.1 million
— Average winning bid for a corporate medallion in 2014.
New York State's $1.8 billion in one-time financial settlements should be prioritized for long-term capital investments, debt reduction, or reserve enhancements rather than being used for recurring operating expenses. Allocations for economic development and ongoing operational costs like labor agreements should be rejected in favor of using these funds to secure long-term fiscal stability.
Recommendations related to One-Shot Revenues
The State’s current year $1.8 billion in one-time financial settlements should be used to provide long-term benefits such as pay-as-you-go capital investments that replace borrowing, enhance reserves, or accelerate debt payments.
The use of one-time financial settlements for operating expenses is not appropriate.
The allocation of $800 million for economic development should be rejected.
Dedicating one-time settlements to the OPEB fund would provide long-term savings for the state’s taxpayers.
Key Data
$1.8 billion
— The State’s current year total in one-time financial settlements.
$150 million
— Amount dedicated to the state’s rainy day fund.
$200 million
— Amount dedicated for health care capital grants.
$270 million
— Amount dedicated to the Department of Transportation capital plan.
$200 million
— Amount allocated for ongoing counterterrorism and emergency response spending.
$155 million
— Amount allocated for first-year costs of labor agreements.
New York State's Executive Budget for fiscal year 2018 utilizes $1.2 billion in fiscal gimmicks, such as shifting workforce costs and delaying debt repayments, to artificially keep spending growth under a self-imposed 2 percent cap. Without these accounting maneuvers, state spending would have grown by 3.2 percent, highlighting how such measures obscure the true fiscal picture and undermine budget transparency.
Key Data
$1.2 billion
— Total value of the four fiscal gimmicks included in the Executive Budget proposal to meet the 2 percent spending cap.
3.2 percent
— Projected growth rate of State Operating Funds spending in fiscal year 2018 if the fiscal gimmicks were not utilized.
$500 million
— Annual savings proposed in the Executive Budget to be achieved by Executive agencies through unidentified measures.
$277 million
— Amount of State Operating Funds spending 'saved' by converting New York City STAR property tax exemptions to Personal Income Tax credits.
$227 million
— Savings yielded in the Fiscal Year 2018 Executive Budget by shifting the costs of more than 3,000 employees to Capital Projects Funds.
$193 million
— Savings in fiscal year 2018 generated by amending scheduled repayments to the New York Power Authority.
Using one-time bank settlement funds to subsidize the New York State Thruway Authority deviates from the principle that roads should be self-supporting through user fees and creates long-term fiscal instability. Instead of relying on these non-recurring revenues, the state should maintain the Authority's self-sufficiency by adjusting tolls and removing unrelated financial burdens like the Canal Corporation.
Recommendations related to One-Shot Revenues
The Governor and the Legislature should make a U-turn in policy and return to a sounder approach to funding the Authority by ending the use of one-time bank settlements to subsidize the Thruway.
The Legislature should concur with the Executive Budget proposal to remove the Canal Corporation from the Thruway Authority to save on operating losses and capital spending.
The Legislature should reject the proposal to require the Thruway Authority to pay for its own policing, which is currently a state-funded cost.
The State should avoid allocating additional bank settlement funds in the 2016-2017 budget to the Thruway, as this moves the state in the wrong direction.
Key Data
$2.3 billion
— The total amount of State funds from bank settlements proposed to subsidize the New York State Thruway Authority.
$1.0 billion
— The amount proposed in the Governor’s Executive Budget for fiscal year 2016-2017 to support the Authority from bank settlements.
$50 million
— The estimated annual operating losses the Thruway Authority would save by removing the Canal Corporation.
$35 million
— The annual cost of policing the Thruway that the Executive Budget proposes shifting to the Authority.
$1.4 billion
— The amount the Thruway spent on canal operations and capital from 1993 to 2015.
$209 million
— The amount of planned capital spending for the Canal Corporation that could be alleviated by removing it from the Thruway.
The fiscal year 2016-2017 New York State Executive Budget proposes utilizing $2.3 billion in one-time legal settlement funds, with a significant portion allocated to transportation and housing capital expenses. However, the plan inappropriately directs $340 million of these non-recurring funds toward recurring tax credits for toll payers, which undermines the necessary funding for infrastructure maintenance.
Recommendations related to One-Shot Revenues
The State should allocate one-time legal settlement funds for non-recurring expenses rather than recurring costs.
The State should refrain from using one-time revenue to subsidize drivers or freeze tolls that are necessary to fund the maintenance and operation of bridges and highways.
Key Data
$2.3 billion
— Total amount of one-time legal settlement funds proposed for spending in the Executive Budget.
$900 million
— Amount of one-time settlement funds allocated for transportation projects.
$640 million
— Amount of one-time settlement funds allocated for homeless and affordable housing.
$340 million
— Amount of proposed settlement spending designated for tax credits that is considered problematic.
Following $5.4 billion in windfall bank settlements received last year, the state has an additional $2.2 billion available for allocation. These significant one-time revenue sources raise questions regarding whether funds will be directed toward infrastructure with documented returns or broadly defined economic development programs.
Key Data
$5.4 billion
— windfall bank settlements received by the state last year
$2.2 billion
— additional bank settlement funds currently available for state officials to allocate
New York State continues to rely on borrowing from public employee pension funds to balance its budget, a practice that creates long-term fiscal risks and interest costs despite the availability of significant one-time revenue. Instead of extending these deferrals, the state should utilize its $5.4 billion bank settlement windfall to pay down existing pension liabilities and restore the funds' long-term health.
Recommendations related to One-Shot Revenues
The State should end the practice of borrowing from pension funds and instead use available bank settlement funds to reduce the outstanding liability from past borrowings.
The State should reverse the planned $713 million pension borrowing for this year and the proposed $395 million deferral next year.
A portion of the State’s $5.4 billion windfall from bank settlements should be allocated to early repayment of prior-year amortizations.
Key Data
$5.4 billion
— unexpected revenue from bank settlements
$1.8 billion
— additional amount proposed to be borrowed from public employee pension funds
$2.5 billion
— outstanding liability from past borrowings
$713 million
— amount the State will defer in pension payments this year
$1.1 billion
— total deferrals from fiscal year 2016 through 2020
$5.1 billion
— total amount likely to be repaid for amortized pension contributions
New York's $5.4 billion in bank settlement funds should be directed toward nonrecurring investments that provide long-term taxpayer returns rather than being used for projects of dubious value. These one-time revenues require a more rigorous cost-benefit framework to ensure they are not wasted on initiatives that fail to deliver measurable economic benefits.
Recommendations related to One-Shot Revenues
These are one-time funds and should be used for nonrecurring items yielding a long-run return for taxpayers.
The Governor’s list of proposed uses for bank settlement funds should be modified to focus more on greater returns.
A stronger framework to evaluate proposed investments relative to return on investment should be developed and adopted.
Key Data
$5.4 billion
— Total bank settlement funds received by New York for regulatory violations.
$1.3 billion
— Allocation of settlement funds to the Thruway Authority.
$750 million
— Allocation of settlement funds for other bridge and road projects.
$400 million
— Allocation of settlement funds to the Metropolitan Transportation Authority for its Access to Penn Station project.
$1.5 billion
— Proposed allocation of settlement funds for an economic development competition among seven regions upstate.
$500 million
— Proposed allocation of settlement funds for broadband investments.
The FY2016 Executive Budget utilizes $5.7 billion in bank settlement proceeds for one-time expenditures and investments, though the merits of specific allocations vary. While some investments like those for the Thruway Authority and MTA are likely to pay off, other proposed uses of these windfall funds remain speculative.
Recommendations related to One-Shot Revenues
The state should ensure that the $5.7 billion in bank settlement proceeds are spent prudently to generate returns on investment.
The state should develop viable capital plans for the Thruway Authority and the MTA to ensure the proposed allocation of $1.7 billion in settlement funds pays off.
The state must create viable financing plans for the MTA and Thruway Authority to address the gigantic holes in their capital plans, as the settlement funds are merely a 'drop in the bucket'.
Key Data
$5.7 billion
— Total bank settlement proceeds used for one-time expenditures and investments in the FY2016 Executive Budget.
$1.7 billion
— Proposed allocation of settlement funds to the Thruway Authority and the MTA.
$850 million
— Amount set aside from settlement funds to settle federal Medicaid liabilities.
$1.5 billion
— Amount designated for an Upstate Revitalization fund to award to Regional Economic Development Councils.
$1.3 billion
— Amount proposed from bank settlements for the Thruway Authority for the new Tappan Zee Bridge and other needs.
The FY2016 New York State budget proposal includes $4.5 billion in windfall settlement funds, raising questions about whether these one-time resources will be invested prudently. This reliance on one-time revenue highlights the need for careful fiscal management to ensure long-term returns on investment.
Recommendations related to One-Shot Revenues
The state should ensure that the $4.5 billion in windfall settlement funds are spent prudently with returns on investment.
Key Data
$4.5B
— Amount of windfall settlement funds proposed for one-time spending in the FY2016 budget.
New York State's $5 billion windfall from bank settlements should be used to reduce long-term liabilities and fund infrastructure rather than creating recurring costs or temporary programs. By prioritizing investments that permanently lower service costs and avoiding non-transparent allocation methods, the state can improve its long-term fiscal health.
Recommendations related to One-Shot Revenues
Any proposal with recurring costs should be immediately rejected.
The State Legislature should resist the temptation to spend one-shot windfall money on long-term commitments, such as school aid or tax cuts.
New York should place a high priority on proposals to permanently reduce the cost of providing services or prepare the State for future challenges.
State leaders should prioritize plans to boost savings and reduce long-term liabilities such as paying down debt, replacing planned borrowing with pay-go capital, shoring up the Rainy Day Fund, and fully funding the State’s pension funds.
Legislative leaders should avoid using memorandums of understanding (MOUs) to allocate lump-sum appropriations for economic development capital programs.
Key Data
$5 billion
— The total amount of the windfall from bank settlements available for state spending.
one-third
— The portion of the state’s sewage systems that have been beyond their useful life for more than 10 years.
40%
— The portion of the state’s pavement that is in fair or poor condition.
$138 billion
— The total size of the state’s annual budget.
27%
— The amount by which design-build procurement reduced project costs according to the Department of Transportation.
New York State should utilize its $4 billion windfall from legal settlements to improve its long-term financial health rather than funding short-term expenses. Recommended strategies include paying down debt, increasing capital investments, addressing unfunded pension and retiree health liabilities, bolstering reserve funds, and funding one-time projects with recurring benefits.
Recommendations related to One-Shot Revenues
The state should reduce long-term debt by using the settlement funds to pay off outstanding bonds, which would lower annual debt service costs.
New York should increase pay-as-you-go capital investments to accelerate state-of-good-repair projects for key transportation and transit assets without incurring new debt.
The state should reduce other long-term liabilities by making pension funds whole and establishing a retiree health insurance trust fund to address unfunded obligations.
New York should increase the Rainy-Day Reserve Fund to help prevent drastic service cuts and tax hikes during future economic downturns.
The state should make one-time investments that provide multiyear benefits, such as purchasing information-technology systems or establishing revolving-loan funds for localities.
Key Data
$4 billion
— The amount of windfall revenue New York state will receive from settlements with large financial institutions.
$52.2 billion
— The total amount of New York state's long-term debt.
$174 billion
— The total capital needs across 47 state agencies and public authorities detailed in the 10-year statewide capital plan.
$66.5 billion
— New York's estimated other-post-employment-benefit (OPEB) liability.
$350 million
— The amount currently held in the Rainy Day Reserve Fund.
$160 million
— The annual benefit provided by a hypothetical $4 billion revolving-loan fund for school district computer equipment.
The fiscal year 2014 budget relies on a $1.75 billion cash infusion from a shift in workers' compensation accounting to cover new spending commitments, including school aid increases and tax breaks. This reliance on one-shot revenue and back-loaded spending reverses recent fiscal progress and creates significant future budget gaps.
Key Data
$1.75 billion
— cash infusion provided by a shift in the accounting method for financing workers’ compensation.
$1 billion
— added revenue plowed into fiscal year 2015 from the workers’ compensation accounting shift.
$500 million
— reduction in future deficits claimed by state leaders using the workers’ compensation accounting shift.
$250 million
— amount authorized in the enacted budget for debt reduction or “fiscal uncertainties”.
New York City's fiscal year 2013 budget relied heavily on $4 billion in non-recurring "one-shot" revenues to close a $4.6 billion gap, masking underlying structural deficits caused by rising health insurance and debt service costs. Relying on these temporary measures delays necessary long-term fiscal solutions and leaves the city vulnerable to budget shortfalls if anticipated revenues, such as taxi medallion sales, fail to materialize.
Key Data
$4 billion
— Amount of non-recurring 'one-shot' resources used to close the fiscal year 2013 budget gap.
$4.6 billion
— Total budget gap for fiscal year 2013 that required closure.
$2.4 billion
— Amount of 2013 expenses prepaid in fiscal year 2012 as a one-shot revenue measure.
$1 billion
— Amount withdrawn from the Retiree Health Insurance Trust to balance the fiscal year 2013 budget.
$635 million
— Revenue included in the fiscal year 2013 budget from the anticipated sale of taxi medallions.
The 2012-13 New York State budget is largely responsible and timely, featuring limited spending growth and a reduced reliance on fiscal gimmicks compared to previous years. However, the budget still includes problematic one-shot revenue measures, such as early payments for local governments and deferred tax credits, alongside questionable expansions of economic development programs.
Recommendations related to One-Shot Revenues
Before additional financial commitments are made, accountability for existing programs should be improved.
Performance metrics and evaluative analysis should be systematically employed to identify failing programs for elimination or redesign before new programs are grafted onto to an already fragmented governance structure.
Instead of being subjected to additional parochial constraints, the power programs should be completely overhauled.
Key Data
$970 million
— Amount in deferred business tax credits reflecting gimmicks authorized before the current administration.
$782 million
— Amount in amortized pension contributions reflecting gimmicks authorized before the current administration.
$7.85 million
— Amount by which the payment in lieu of taxes for the City of Albany is being advanced in fiscal year 2013.
$6 billion
— Total annual spending on economic development in New York State, including capital grants, tax breaks, and direct subsidies.
$1.9 billion
— Additional revenue raised by a package passed in December 2011 that aided the budget's progress.
$900 million
— Projected fiscal year 2013-14 budget gap, a figure low relative to historical standards.
New York City is shifting away from a decade of relying on unanticipated tax revenue surpluses to balance its budget, forcing a reliance on $2 billion in non-recurring one-shot resources to close the fiscal year 2013 gap. This transition necessitates fundamental changes to the budget process as temporary solutions like asset sales and trust fund transfers are no longer sustainable substitutes for recurring revenue.
Recommendations related to One-Shot Revenues
The Mayor and the City Council will be obliged to consider fundamental changes in the City’s budget if large unanticipated tax revenues are no longer a recurring part of the annual budget process.
Key Data
$1 billion
— Revenue from the sale of taxi medallions used to balance the fiscal year 2013 budget.
$1 billion
— Funds drawn from the retiree health insurance trust fund to balance the fiscal year 2013 budget.
$5.3 billion
— The high point of unanticipated tax revenues reached in fiscal year 2007.
$7 billion
— The amount by which Wall Street profits are running below what was assumed when the budget was adopted.
$114 million
— The amount by which fiscal year 2012 tax collections are exceeding the initially budgeted sum.
$42.2 billion
— The total tax revenues for fiscal year 2012.
New York State faces a persistent budget gap that requires structural reforms to pension, school aid, and Medicaid spending rather than continued reliance on temporary fiscal gimmicks and one-shot revenue sources. By ending practices like deferring business tax credits and amortizing pension payments, the state can move toward a more sustainable fiscal path without needing further tax increases.
Recommendations related to One-Shot Revenues
The State should end the deferral of $970 million in business tax credits to stop masking the structural deficit.
New York should take a hiatus from one-shot revenues, such as sweeps from dedicated revenue funds and mandatory contributions from public authorities, to avoid relying on temporary resources to close budget gaps.
State leaders should end the amortization of a $782 million payment to the pension system to avoid long-term interest costs and address underlying cost drivers.
Key Data
$970 million
— The amount of business tax credits the state plans to defer as a fiscal gimmick.
$782 million
— The amount of the pension system payment the state plans to amortize.
$800 million
— The total amount of one-shot resources used by the state in the previous year.
Diverting money from the Health Insurance Premium Stabilization Fund to balance the fiscal year 2012 budget serves as a temporary "one-shot" fix that fails to address the city's underlying structural budget imbalance. Implementing health insurance premium cost sharing, similar to the state's model, would generate $625 million in annual savings and provide a more sustainable long-term solution than relying on one-time fund transfers.
Recommendations related to One-Shot Revenues
City and labor leaders should focus their cooperative efforts on meaningful reforms of health insurance instead of relying on one-shot revenue sources.
The City’s elected and union leaders should seek large-scale savings that reduce the need for tough budget choices in the future.
The City should implement cost sharing for health insurance premiums, following the example of State employees who contribute 10 percent of the premium for individual coverage and 25 percent for family coverage.
Key Data
$500 million
— The amount accumulated in the Health Insurance Premium Stabilization Fund.
$4.7 billion
— The projected budget gap for fiscal year 2013.
$625 million
— The potential annual savings from implementing health insurance premium cost sharing.
$1 billion
— The annual taxpayer contributions to union welfare funds.
$117 million
— The amount transferred from the Health Insurance Premium Stabilization Fund to union welfare funds in 2009.
$150 million
— The savings achieved through increased deductibles for services like emergency room visits and in-patient facility admissions.
New York State has relied on $19.4 billion in temporary revenue enhancements and one-shot measures to sustain spending growth despite a shrinking tax base since the 2008 recession. To achieve long-term fiscal sustainability, the state must allow these temporary measures to expire and restructure spending commitments to align with actual revenue growth.
Recommendations related to One-Shot Revenues
It is now time to allow temporary revenue measures to phase out and to begin to restructure spending commitments.
In order to avoid a perpetual reliance on one-shot revenues and tax increases, spending growth must be more closely aligned with long-term revenue growth.
Key Data
$19.4 billion
— Total revenue enhancements and temporary revenues currently benefiting the State.
$1.1 billion
— Non-recurring revenues ('one-shots') in the current fiscal year.
$6.6 billion
— Federal stimulus package (ARRA) funding received by the state.
$21.2 billion
— Projected budget gap for next year without revenue measures.
$8.5 billion
— Reduction in base tax collections in the current fiscal year.
$11.7 billion
— Revenues attributable to actions taken since the start of fiscal year 2008-09.
New York City's fiscal year 2011 budget gap was largely closed using $369 million in temporary revenue actions, such as federal grants and funding shifts, which accounted for 63 percent of the total program. Because these one-time sources are not recurring, the city faces a tighter fiscal outlook for 2012, requiring $750 million in expenditure actions and significant headcount reductions to address the budget shortfall.
Recommendations related to One-Shot Revenues
The City must implement reforms to reduce employee health insurance costs to avoid relying on harmful service cuts to close future budget gaps.
The City must implement reforms to reduce pension costs to avoid relying on harmful service cuts to close future budget gaps.
Key Data
$369 million
— The amount of revenue actions in the fiscal year 2011 budget gap program, representing 63 percent of the total.
$585 million
— The total value of the fiscal year 2011 program to eliminate the budget gap.
$1 billion
— The proposed total program to eliminate the budget gap for fiscal year 2012.
$750 million
— The amount of expenditure actions included in the fiscal year 2012 budget gap program.
8,264
— The total number of headcount reductions planned for fiscal year 2012.
$350 million
— The amount of cuts to education alone in the fiscal year 2012 budget gap program.
The Governor's 2010-11 budget proposal addresses a $6.7 billion deficit by utilizing $565 million in one-shot revenues, a significantly lower reliance on nonrecurring measures compared to previous economic downturns. This approach avoids mischaracterizing revenue initiatives as spending cuts and refrains from assuming continued federal stimulus aid or extended tax surcharges to solve future fiscal gaps.
Recommendations related to One-Shot Revenues
The Legislature should seize the opportunity to move the State's finances toward structural balance by embracing the Governor's proposal for real and recurring spending reductions.
Key Data
$6.7 billion
— The size of the budget hole the State is facing in the 2010-11 fiscal year.
$565 million
— The amount of one-shots proposed in the Governor's executive budget.
8.4 percent
— The portion of the $6.7 billion budget gap that the proposed one-shots are intended to close.
$5.2 billion
— The amount of the $11.5 billion budget gap in fiscal year 2003-04 that was proposed to be financed with one-shot borrowed funds from the tobacco settlement.
New York City's budget gap of $4.1 billion is being addressed with one-shot measures, such as a $395 million drawdown from a retiree health insurance trust fund, which should be avoided. Additional tax revenue should not be used as a justification to delay necessary cost-cutting measures.
Recommendations related to One-Shot Revenues
The city should avoid using one-shot measures to balance the budget.
The city must not use additional tax revenue as an excuse to avoid needed cost-cutting.
Key Data
$4.1 billion
— The currently projected budget gap for New York City.
$395 million
— The amount of the drawdown from a retiree health insurance trust fund used as a one-shot measure.
$200 million
— The amount of new pollution-remediation operating expenses previously capitalized that the budget fails to recognize.
$500 million
— The amount of future concessions from labor unions assumed in the mayor's plan.
The 2009 Deficit Reduction Program relied heavily on non-recurring items, with 59% of the $3.2 billion deficit covered by these one-shot revenues, an increase from the Governor's initial proposal. While the state successfully implemented a new, less costly pension tier for new employees, it simultaneously made permanent a provision restricting the ability of school districts to modify retiree health insurance benefits.
Key Data
$2.8 billion
— Total value of the Deficit Reduction Program package.
$400 million
— Amount the Deficit Reduction Program fell short of the Governor’s proposed target.
40%
— Share of the $3.2 billion current-year deficit covered by non-recurring items in the Governor's earlier proposal.
59%
— Share of the $3.2 billion current-year deficit covered by non-recurring items in the final Deficit Reduction Program package.
New York's deficit reduction plan relies on one-shot revenues to cover 52% of the $3.2 billion deficit, utilizing accelerated federal stimulus funds rather than implementing recurring savings. This reliance on short-term patches leaves the state facing a projected $19.5 billion budget gap in fiscal year 2012-13, necessitating more sustainable long-term fiscal strategies.
Recommendations related to One-Shot Revenues
If the State is to avoid a slash and burn assault on its services in 24 months, spending must come down in meaningful ways that have recurring value.
Key Data
$3.2 billion
— Deficit to be closed this year.
52%
— Percentage of one-shots used to close the deficit.
$391 million
— Accelerated federal stimulus money included in the deficit reduction plan.
$19.5 billion
— Expected budget gap in fiscal year 2012-13.
$45 million
— State savings expected from the Medicaid measure.
23%
— Expected increase in employee compensation over the next three years.
The 2005-2006 New York State budget relies on $685 million in one-time revenues and $321 million in pension borrowing to close a $4.2 billion gap, a practice that should be avoided in favor of recurring revenue sources. Relying on these temporary measures to fund recurring operating expenses undermines long-term fiscal health and fails to address underlying budget gaps.
Recommendations related to One-Shot Revenues
The Legislature should reject the proposal for pension borrowing.
One-time resources should be set aside for prudent uses such as increasing the rainy day funds or replacing borrowing as a source of capital project funds.
The Legislature should replace the one-shots proposed by the Governor to balance the fiscal year 2006 budget with added spending discipline.
The Legislature should permanently repeal the sales tax exemption on clothing and eliminate the two sales-tax free weeks to generate recurring revenue.
The Governor’s proposals for expanding the STAR-Plus and Co-STAR programs should be dropped to avoid unnecessary costs.
Key Data
$685 million
— Amount of one-shots proposed to close the fiscal year 2006 budget gap.
$321 million
— Amount of borrowing from the pension system proposed to close the fiscal year 2006 budget gap.
$4.2 billion
— Total budget gap in fiscal year 2006.
$561 million
— Gross revenues generated by re-imposing the sales tax on clothing from June 1, 2005, through March 31, 2006.
$105 million
— Additional recurring revenue generated by repealing the clothing sales tax exemption compared to the Governor's proposal.
New York's state budget process is frequently criticized for relying on one-shot revenues, borrowing, and cost-shifting to localities to achieve balance, rather than relying on recurring revenues. To address these systemic issues and the resulting fiscal dysfunction, the state should pursue constitutional reforms, including a more structured budget process, independent revenue estimating, and campaign finance reform.
Recommendations related to One-Shot Revenues
New York should implement a constitutionally defined staged process in the legislature for considering the executive budget, engaging key committees, with conference committees to resolve differences, to build the legislative role and redistribute power within each house.
The state should establish a consensus system for revenue estimating built into the budget process, provided that legislative powers in budgeting are otherwise assured in the constitution.
New York should pursue constitutionalization of the beginning of the fiscal year as a first step toward establishing a real budget deadline.
The state should adopt legislative redistricting by commission to enhance fairness and mitigate the appearance of self-interest.
New York should implement public financing of legislative election campaigns, with concomitant limits on direct and indirect private funding, to address the imbalance in campaign resources.
Key Data
$170 Million
— Amount appropriated in 2003 to fund projects advanced by legislative leaders, outside of the executive budget.
$1.5 Billion
— Total funds available to the Governor, Assembly Speaker, and Senate Majority Leader to separately allocate in the 1998 election year.
$26 Million
— Amount allocated by legislative leaders in 1984 for projects favored by individual majority party members in their districts.
$80 Million
— Amount allocated by legislative leaders in 1986 for projects favored by individual majority party members in their districts.
$30 - 40 Million
— Estimated cost of a public financing program for state legislative races in New York.
$206,735,159
— Total budget proposed for the New York State legislature for the 2003-2004 fiscal year.
New York State has frequently relied on one-time actions and disappearing revenues, such as borrowing against tobacco settlements, to close multi-billion dollar budget gaps rather than addressing structural imbalances. To improve fiscal stability, the state should adopt generally accepted accounting principles for budgeting, eliminate off-budget accounts, and establish a more robust rainy day fund.
Recommendations related to One-Shot Revenues
Eliminate the use of “off-budget” accounts.
Require that the adopted budget be balanced in accord with generally accepted accounting principles.
Require a “rainy day” fund larger than the current Tax Stabilization Reserve Fund.
Key Data
$5.7 billion
— The State relied upon <b>$5.7 billion</b> in one-time actions and disappearing revenues to close the fiscal year 2003-04 budget gap.
$1.7 billion
— In fiscal year 2002-03, <b>$1.7 billion</b> out of $2.5 billion in Health Care Reform Act spending was disbursed outside the traditional budget process.
$9.3 billion
— In the 2003-04 fiscal year, the State faced a budget gap of <b>$9.3 billion</b>, which was partially closed using one-time actions.
New York State faces a recurring fiscal crisis driven by structural deficits and an over-reliance on temporary, one-shot revenue measures rather than sustainable spending reductions. To achieve long-term stability, the state must implement a multi-year plan that aligns expenditures with recurring revenues, adopts transparent accounting practices, and avoids the use of long-term borrowing to cover operating expenses.
Recommendations related to One-Shot Revenues
The State should bring the budget into balance over three years by reducing expenditures to levels supported by the current revenue system.
Legislators should close the gap between spending and revenues in the interim period by imposing a temporary, declining tax instead of relying on borrowing.
The State should be required to balance its budget based on Generally Accepted Accounting Principles (GAAP) to prevent the accumulation of deficits.
The Division of Budget should be required to prepare a four-year financial plan with quarterly updates to improve transparency.
All off-budget accounts should be brought on budget to ensure a unified statement of all planned revenues and expenditures.
Key Data
$9.3 billion
— The estimated gap in fiscal year 2003-04 that the Executive Budget identifies.
$11 billion
— The total problem on a cash basis in the coming year, assuming a $1.5 billion short-term loan.
$6.3 billion
— The cumulative deficit to be financed over the next three fiscal years if additional cuts are implemented.
$4.7 billion
— The amount borrowed by the Local Government Assistance Corporation (LGAC) over three years to finance an accumulated deficit.
$7.4 billion
— The total cost of repaying the LGAC bonds over thirty years.
$2.5 billion
— The annual deficit the State would incur under the Governor's plan.
New York City's reliance on borrowing and one-time budget gimmicks to cover operating expenses creates long-term financial burdens that future taxpayers will be forced to repay with interest. Instead of using these unsustainable methods, the city should focus on implementing structural expenditure reductions and revenue enhancements that provide recurring value.
Recommendations related to One-Shot Revenues
Current efforts to balance the budget should eschew borrowing and other gimmicks.
The City should not – and probably cannot because of creditor resistance – again borrow to close the coming budget gap.
Instead, it should focus on implementing expenditure reductions and revenue enhancements with recurring value.
No part of the budget should be considered off limits when dealing with a large budget gap.
Funds from asset sales should be reinvested in new capital projects or be used to pay off outstanding debt.
Key Data
$598 million
— Amount borrowed by the City in fiscal year 2001-02 to pay for operating expenses.
$2 billion
— Amount the City is borrowing in the current fiscal year to meet operating expenses.
