Senate GOP releases revenue forecast

   In its mid-year economic and revenue-forecast report, the Senate Republican majority said the governor’s Division of Budget consistently overestimates future-year budget deficits. In the past three years, the executive has overestimated the out-year gaps by an average of $5.7 billion, according to the report by Global Insight.

   Although recent events in the financial markets are likely to have a negative impact in the second half of the fiscal year, which ends March 31, state general fund receipts are $138 million higher than projected in the Budget Division’s first-quarter update and spending was $203 million lower, the report said. But Gov. David Paterson doubled the three-year deficit projection (through 2011-12) from $26.2 billion estimated three months ago to $45.5 billion, the GOP report said.

   The Senate forecast said the general-fund spending for Medicaid will be less than predicted by the governor. Republicans estimate it will be $8.95 billion this year and $10.59 billion the following year, $265.8 million less than the Division of Budget projection.

   Also in the report:
   —Tax collections are estimated at $61.6 billion this year and $61.1 billion in 2009-10.
   —Employment is expected to increase by 0.3 percent in 2008-09 and decline by 1.1 percent in 2009-10.
   —The 4.6 percent growth in personal income this year was primarily a result of economic-stimulus checks from the federal goverment. Income will grow at a slower pace the following year, at a rate of 1 percent.
   
  The Assembly Democratic majority, which released their forecast earlier this week, predicts tax revenues will slip to $59 billion in 2009-10, $1.1 billion below the governor’s estimate.

   The governor and both houses of the Legislature are required to issue mid-year economic forecasts. A joint financial update is due by Nov. 15.

   “We will continue to work cooperatively with the Governor and the Assembly to meet the current economic challenges facing this State, both in the short and long-term.  Meanwhile, we look forward to reviewing the governor’s plans for closing the current-year’s projected budget deficit,” Senate Majority Leader Dean Skelos, R-Nassau County, said in a statement.

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