ALBANY, N.Y. (AP) — New York’s top financial officer is calling for the state to set millions more dollars aside in case of a financial downturn.
New York should fully fund its rainy day reserves within five years, Democratic Comptroller Thomas DiNapoli said in a report being released Friday.
The economy is booming, but the comptroller said in an interview that New York must be better prepared for an economic downturn. The rainy day fund, he said, must be a high priority during ongoing state budget negotiations, especially at a time when state revenues are up but hard to predict and Medicaid spending is surging above budgeted expectations.
“A concern that many have is that the recovery just has been defying historic trends,” he said. “At some point there will be a correction in the economy.”
Lawmakers and Democratic Gov. Andrew Cuomo this year moved to add $250 million to rainy day funds. And the state plans to add another $428 million this spring. That would leave New York with $2.5 billion in rainy day funds.
But that’s less than half of what New York can set aside under state law: $5.9 billion, DiNapoli said.
New York has resorted to budget cuts following market collapses in the past two decades, he said.
“The reality is the reserves weren’t built up to significant to drawn them down or have an impact,” he said.
Elected officials, he said, should also allow the state to set aside up to 10% of general fund revenues — up from 7% currently. The comptroller is also pressing New York to require the state to regularly deposit money in rainy day funds.