How much more will NY need to borrow to pay (deficit spending) for Unemployment Insurance Payments for these newly unemployed workers? What businesses will be attracted with these added costs to fund New York's unemployment insurance costs?
Large unplanned deficits were already expected by the NY Comptroller even before these latest unemployment numbers were released. DiNapoli "warned that estimates about the amount of personal income tax that will flow into state coffers may not be reliable. He noted that the current fiscal year's budget was overly optimistic about job growth and ended up over $1 billion short in anticipated tax revenue". Or over $1 billion dollars is carried over to Cuomo's new budget as an expense.
Here's what Comproller DiNapoli says in his report on expected personal income tax revenues for Cuomo's budget:
"Personal Income Tax
For SFY 2011-12, All Funds PIT receipts are forecast to increase by $2.6 billion, or 7.4 percent, over the prior year. The increase is attributable to the improving economy, higher refunds in SFY 2010-11, and the voluntary compliance initiative in the Executive Budget. Base tax receipts, which net out the $500 million in additional refunds in SFY 2010-11 and the elimination of the high income tax provisions in the fourth quarter of SFY 2011-12, are projected to grow by 11.4 percent.for these proposed budgets."
The FACTS:
1. With higher unemployment, personal income tax receipts would not increase by $2.6 Billion as Cuomo promised, but rather decrease in Cuomo's new budget and $1 billion is carried over from prior year.
2. These unemployment revenue losses are accumulating now and will further increase the missing money, even before the budget year begins.
3. New York unemployment will further increase with school, local government and State employee layoffs resulting from budget cuts at all levels.
4. Or Cuomo needs to borrow way in excess of another $3.6 billion dollars (2.6+1.0=3.6) just to replace delusional tax revenue increases in the budget.
Default, bankruptcy are more likely. But luckily for NY's Cuomo, California's Brown may be first to go down as Brown caves to Union demands.
More Facts:
Here are the latest metropolitan unemployment rates just released last week that show that in every NY metro area unemployment increased. The data below is from the Press Release of Bureau of Labor Statistics
Location %Dec2010 %Jan2011
New York as Whole Total................ 8.0 9.0 Albany-Schenectady-Troy.............. 7.1 8.2 Binghamton........................... 8.5 9.6 Buffalo-Niagara Falls................ 8.1 9.1 Elmira............................... 8.0 8.8 Glens Falls.......................... 8.5 9.9 Ithaca............................... 5.6 6.6 Kingston............................. 8.0 9.2 NY-Northern New Jersey-Long Island... 8.1 9.0 New York City..................... 8.6 9.4 Poughkeepsie-Newburgh-Middletown..... 7.6 8.6 Rochester............................ 7.8 8.7 Syracuse............................. 8.3 9.3 Utica-Rome........................... 8.1 9.3
The talk was cheap
