Budget Shortfall Forces Spitzer To Scramble
February 11, 2008
Confronted by an unexpected budget shortfall, Governor Spitzer is proposing to further raise taxes on private health insurers and to scale back the growth of Medicaid patient reimbursement rates for hospitals and nursing homes, budget officials said yesterday.
A weakening in the economy has forced the Spitzer administration to lower its revenue estimate for the upcoming fiscal year by $384 million.
The revised forecast punched a new hole in the governor’s proposed 2008–09 executive budget, which the administration delivered to lawmakers last month.
Mr. Spitzer is expected today to propose several measures for closing the gap in the 21-day budget amendments, which historically have been used by governors for making technical changes to executive budgets. It’s unusual for them to alter spending and revenue projections by such a significant amount.
Administration officials said the adjustment to general fund revenues was the result of declining employment and wage growth, lower-than-expected corporate profits, and the anticipation that Wall Street bonuses will be flat in December. “These changes acknowledge that we’ve seen a continued deterioration in the economy,” a spokesman for the budget division, Jeffrey Gordon, said in a statement. “Adapting our financial plan to reflect the worsening economic climate facing the state is the only responsible and prudent course of action.”
Source: NY Sun Read the full story here
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