State Comptroller Alan G. Hevesi today released the July 2005 cash report.

With one-third of the State’s 2005-06 fiscal year now complete, General Fund receipts (including transfers) were $2.5 billion or 18.6 percent ahead of last year. All Funds receipts were $2.3 billion or 7.6 percent ahead of last year.

General Fund spending (including transfers) was $918.5 million or 6.5 percent higher than during the first four months of last fiscal year. All Funds spending was $1.2 billion or 4.2 percent higher than last year. As anticipated in the Enacted Financial Plan, these figures reflect a partial acceleration from September 2005 to July 2005 of a $953.7 million payment into the New York State and Local Employees Retirement System (NYSLERS) from the State and the Office of Court Administration. Absent this payment, spending would be effectively level compared to last year: General Fund 0.2 percent lower and All Funds 0.9 percent higher.

The General Fund closing cash balance on July 31, 2005, was $3.6 billion, which is $111.7 million or 3.2 percent higher than the current 2005-06 Financial Plan, updated August 1, 2005, had projected.

Following several calls for reform from Comptroller Hevesi, with the enactment of the 2005-06 budget, all revenues and most disbursements pursuant to the Health Care Reform Act (HCRA) are now accounted for within State funds. The Office of the State Comptroller is working with the New York State Department of Health to ensure a full and accurate transition of the reporting of the various revenue streams and spending obligations. Appended to this month’s cash report are new schedules of HCRA receipts and disbursements.

General Fund Receipts and Disbursements
Net personal income tax collections (prior to transfers to dedicated funds) were up $1.4 billion or 16.7 percent higher from last year. This increase is driven by estimated payments, which were $1.3 billion higher through July 2005 than through July 2004, a 42 percent increase.

Consumption/use tax receipts in the first four months of the fiscal year stayed basically flat, falling 0.4 percent, or $11.9 million, over last year. Business tax receipts, however, rose by nearly one-half, from $957.3 million in the first four months of 2004-05 to $1.38 billion in the first four months of 2005-06. The largest component of business tax growth was in the corporate franchise tax, which rose from $453.1 million last year to $812.1 million this year. Business tax receipts rose because of both increased corporate earnings and higher collections through audits conducted by the Department of Taxation and Finance.

In comparison to the current 2005-06 Financial Plan, General Fund tax receipts were $62.9 million higher than project, or 0.5 percent. Total receipts, which include federal and miscellaneous receipts as well as transfers from other funds, were 0.7 percent, or $112.3 million, higher than expected.

General Fund disbursements were a net $918.5 million higher than last year, an increase of 6.5 percent. Local Assistance payments decreased $64.4 million, or 0.7 percent. Education spending rose, from increased state aid payments made in support of public schools as well as payments to schools for education aid to physically handicapped children, but was offset by lower Social Service spending. There was an additional Medicaid cycle payment made in April 2004 that had no comparable payment in April 2005, and the use of Special Revenue Fund resources has resulted in reductions to General Fund Medicaid spending by $517 million this year.

Department Operations spending decreased 2.2 percent, or $67.6 million. General State Charges increased $988.5 million, or 91.2 percent. This is almost entirely due to the acceleration into July 2005 of a pension fund contribution scheduled to be made in September 2005. General Fund transfers to other funds were $62.1 million higher, or 7.8 percent.

Total Governmental Receipts and Disbursements
Total governmental receipts in the current fiscal year increased $2.3 billion or 7.6 percent from the first four months of the 2004-05 fiscal year. As described above, personal income tax receipts grew significantly, an increase of $1.4 billion or 16.7 percent over the first four months of 2004-2005.

Consumption/use taxes rose a net $227.9 million or 5.2 percent. The bulk of this increase is the result of additional cigarette tax collections now coming on budget as a result of new HCRA accounting practices. Cigarette tax collections through July 2004 totaled $351.8 million. Of that, only $144.6 million was counted as a State revenue, while $207.2 million was transferred to the HCRA pools, which were then off-budget. In the current fiscal year, a total of $346.4 million in tax receipts are deposited in State funds, no longer requiring a transfer to the HCRA pools.

Business tax revenues increased by $514.2 million or 35 percent. All Funds business tax receipts are higher this year due to both increased corporate earnings and higher audit collections.

Other taxes increased $181.2 million or 36.9 percent. Miscellaneous receipts rose $219.1 million or 5.1 percent, and federal grants decreased $240.3 million or 2.2 percent. This reflects the higher Federal Medical Assistance Percentage (FMAP) last year compared to this year.

Total governmental funds disbursements increased $1.2 billion, or 4.2 percent. This includes a $137.7 million decrease (0.7 percent) in local assistance spending. Social service grants, the largest component of local assistance spending, were lower through July 2005 by $793.9 million, or 6.4 percent. This is due partly to the continuing effect of higher expenditures in April 2004 because of the delayed Medicaid payment from March 2004 (with no corresponding delayed payment in March 2005).

Department Operations rose $119.5 million, or 2.4 percent. General State Charges increased $991.2 million, or 78.6 percent, due to the early partial payment to NYSLERS. Spending on debt service payments increased $20.3 million or 2.2 percent, and spending on capital projects increased $222.8 million, or 19.2 percent.
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