WPCNR ALBANY ROUNDS. By John F. Bailey. August 6, 2010:
Assemblyman Robert Castelli of the White Plains/Lewisboro 89th Assembly District, just back from Albany Friday afternoon, detailed for the first time exclusively to WPCNR precisely how the Albany legislators made up the $9.2 Billion budget gap when they passed the $136.5 Billion state budget Wednesday
They are making up more than half the gap with stimulus money from Washington intended to save jobs through “shovel ready” projects.
Castelli told WPCNR today that the legislators used $5.7 Billion awarded New York State as part of President Barack Obama’s American Recovery and Reinvestment Act. He said the application of sales taxes to clothing purchased for under $110 and increased fees in the state, and cigarette taxes is expected to make up another $1.2 Billion.
He reports that the state will defer $2 Billion in tax credits held back in 2010, and the state will “borrow” $1 Billion from the state pension fund to close the gap.
In official news releases from the governor's office, it has not been made clear the step-by-step, cash building blocks that were put together to eliminate the $9.2 Gap. WPCNR was curious about that and we contacted Mr. Castelli to get his analysis of the "Gap Cap."
Asked what financial conditions created the $9.2 Billion gap legislators were wringing their hands over last week, Castelli said $4 Billion of the gap was debt service the state owed and $4 billion in revenue shortfalls in sales taxes and tax receipts, Medicaid cuts, and pension shortfalls.
WPCNR asked Castelli the sources of actual funds that make up the gap. Castelli said “I’m no economist, but first of all you need a Ph.D in economics to figure this out. The gap was created originally by falling revenues, the decline in Medicaid funds (from Washington) and the decline in pensions (performance and future obilgations).”
The Senate passed the budget Wednesday of $136.5 Billion, a 2% increase over the 2009-2010 budget.
