New York State Faces $14 Billion Deficit, Lieutenant Governor Ravitch Says
Dec. 15 (Bloomberg) -- New York Lieutenant Governor Richard Ravitch talks about the state's deficit and recommendations for balancing the budget. Ravitch speaks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)
New York state would face a $14 billion deficit for the year starting April 1 if it measured with a more accurate system, Lieutenant Governor Richard Ravitch said.
The state’s use of cash accounting, in which spending and revenue are recorded only as they occur, is “misleading,” Ravitch, 77, said today in an interview on Bloomberg Television’s “InBusiness with Margaret Brennan.”
New York should use a version of generally accepted accounting principles, in which expenditures and receipts are recorded as they are incurred or earned even though they may not have actually happened, he said. He made a similar proposal in March.
“The real structural deficit, the difference between recurring revenue and recurring expenditures, is far greater than the published estimates of the deficit,” he said in the television interview.
Using GAAP accounting, the state has an accumulated deficit of $3.6 billion through the year that ends March 31, according to a passage on page 73 of a 443-page budget document.
For next year, the Division of Budget, using cash accounting, projects New York’s deficit at $9 billion, assuming that lawmakers close a $315 million gap for this year.
Revenue could be $1 billion less than spending this year, Comptroller Thomas DiNapoli said last month. Because lawmakers are not acting to close that difference, next year’s gap could be more than $11 billion, according to Dennis Tompkins, a spokesman for DiNapoli.
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To contact the reporter on this story: Michael Quint in Albany, New York, at mquint@bloomberg.net.
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net
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