New York state Comptroller Tom DiNapoli warns the trajectory of projected state spending is estimated to increase at a rate faster than expected revenues, creating cumulative outyear budget gaps estimated by the state Division of Budget to total $27.5 billion through the state’s fiscal year 2030, according to a report he released Wednesday on Gov. Kathy Hochul’s executive budget proposal.
DiNapoli said projections for spending are higher than those for revenue over the state budget period. State operating funds disbursements are projected to grow 21.5%, outpacing projected growth of 8.7% in receipts. General Fund receipts are expected to grow 9.8% compared to disbursements that are projected to grow almost twice as fast, 18.5%. Consequently, outyear budget gaps are forecast to be $6 billion in state FY 2028, $9 billion in SFY 2029, and $12.5 billion in SFY 2030.
The comptroller said much of the state’s spending growth stems from Medicaid spending, usually the biggest spending item in the state budget every year. State-share Medicaid spending has grown $20.7 billion, or 89%. From FY 2026 to FY 2030, the Department of Budget projects it will grow by an additional $12.9 billion (29.4%). Containing Medicaid costs has been an ongoing challenge for the state, and the rapid growth in Medicaid spending may risk crowding out other priorities, DiNapoli said.
DiNapoli said actions taken in Washington also create increased fiscal strains that are likely to affect the state’s economy and finances.
DiNapoli said President Donald Trump’s tax and policy bill enacted in July limited and shifted federal support for the social safety net, and will affect how New York provides key services, including health care coverage for many New Yorkers. He estimates the new law will result in a $9.4 billion decrease in fiscal year 2027 from 2026 levels, a 10% decrease. The largest dollar change in projected federal aid is with the state’s Essential Plan, for which the Department of Budget projects a decrease of $10.8 billion. Aid for social welfare is projected to decrease by $270 million.
The report added that administrative actions increasingly place at risk the level, timing and reliability of support flowing to the state, as there have been numerous attempts by the Trump administration to freeze, withhold or cut funding to the states, including funding to support child care, food assistance, clean energy projects and major infrastructure projects such as the Gateway Hudson Tunnel Project.
“The Executive Budget for the upcoming state fiscal year comes at a time of unusual fiscal uncertainty, caused largely by federal policies that have injected unnecessary volatility into the state and national economies, and disruptive changes in the state’s relationship with the federal government,” DiNapoli said in a statement. “These policies will result in lost funding and increased costs to the state and could deal a devastating blow to hundreds of thousands of New Yorkers with the loss of health coverage, nutritional assistance, safety net protections and more. As negotiations commence, policymakers need to proceed with caution as they work on balancing the budget, improving affordability and maintaining vital services for New Yorkers. I oppose the proposals to erode contract oversight by my office for billions in spending of taxpayer money. Independent oversight and broader competition in the procurement process are not obstacles but are essential checks that ensure public funds are spent responsibly and fairly.”
DiNapoli’s report also raised concerns that certain proposals in the executive budget limit government accountability and bypass the oversight of the comptroller’s office.
The state budget is due on April 1, as the current fiscal year ends on March 31.