NEW YORK (AP) -- New York state budget officials predicted Tuesday that the national recession will end sometime in the third quarter this year.
State Budget Director Laura Anglin released the state's updated financial plan, which projected an upturn in the economy later this year.
She attributed the anticipated improvement to the federal stimulus money, but cautioned that the state isn't expecting a major rebound. In 2003, a Wall Street boom put the state and national economy back on track after an economic decline. But Anglin said she expects almost no growth in the financial industry.
The Division of Budget says economic conditions have deteriorated substantially in the state over the past six months. It also projects a 4.2 percent decline in New York wages for 2009.
The state has eliminated $20.1 billion in debt between the 2009-2010 budget and an emergency session for the 2008-2009 budget. Budget officials note that they controlled growth -- the equivalent of budget cuts in Albany-speak -- with state spending increasing just 0.7 percent.
But that includes a temporary, three-year increase in taxes on wealthier taxpayers, $10.9 billion in ``extraordinary'' federal aid this fiscal year, and $2 billion in one-time fixes that include transferring unused cash from the New York Power Authority and delaying scheduled Medicaid payments.
State budget officials point out that they've reduced the state's project budget gaps in the next four years. So instead of a $22.8 billion deficit in the 2012-2013 budget, the deficit would be $13.7 billion -- still a massive gap after federal funds run out and taxes on the rich end.
The tax on the wealthy begins with single filers earning $200,000 a year, to pay a higher tax rate of 7.85 percent. Rates will increase to 8.97 percent on annual incomes above $500,000. The top rate was previously 6.85 percent on those earning more than $40,000.
The 2009-2010 state budget is $131.8 billion.
E-Mail Story
Print Story
